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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
(Mark One)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from to
OR
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report
Commission file number
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
(Exact name of Registrant as specified in its charter)
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation)
(Address of principal executive offices)
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)
Securities registered or to be registered, pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of business covered by the annual report.
Series A Common Shares
Series B Common Shares
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted, electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐ | by the International Accounting Standards Board ☒ | Other ☐ |
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
EXPLANATORY NOTE
(1) | Item 4.B. Information on the Company – Business Overview, to clarify that the one supplier that constitutated approximately 80% of the cost of sales of the Lithium and Derivatives business segment is the Chilean Production Development Corporation (Corporación de Fomento de la Producción), known as Corfo; |
(2) | Item 8.A.6. Financial Information – Export Sales, to include in the table of consolidated sales 2022 data on foreign sales that was inadvertently omitted from the Original Form 20-F; |
(3) | Item 18. Financial Statements, to revise the Company’s previously issued consolidated financial statements to correct an inadvertent error on page F-7 in the presentation of the basic and diluted earnings per share for 2021 and 2020, to add Note 2.2.1 (b) to include a discussion of the revision to the 2021 and 2020 basic and diluted earnings per share amounts, and to update the disclosure in Note 3.26 to include a summary table of the basic and diluted earnings per share calculation, which includes the weighted average number of shares outstanding, which was not previously disclosed, and consolidates other information provided in other parts of the Form 20-F; and |
(4) | Item 19. Exhibits, to update the exhibit index to reflect the updated certifications of the Chief Executive Officer and Chief Financial Officer of the Company and that certain exhibits were previously filed with the Original Form 20-F. |
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Amendment No. 1 also includes, as Exhibits 12.1, 12.2, 13.1 and 13.2, the certifications of the Chief Executive Officer and Chief Financial Officer of the Company pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended.
This Amendment No. 1 sets forth Items 4, 8, 18 and 19 of Form 20-F in their entirety and reflects the revisions and changes described above. Except for the amendments described above, the updated certifications of the Company’s Chief Executive Officer and Chief Financial Officer and the consent of the independent registered public accounting firm, this Amendment No. 1 does not modify or update other disclosures in or exhibits to the Original Form 20-F, which as amended by this Amendment No. 1, speaks as of April 26, 2023 and is not intended to reflect events that may have occurred subsequent to the initial filing date of the Original Form 20-F on April 26, 2023. Therefore, this Amendment No. 1 should be read in conjunction with the Original Form 20-F.
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PRESENTATION OF INFORMATION
In this Annual Report on Form 20-F, except as otherwise provided or unless the context requires otherwise, all references to “we,” “us,” “Company” or “SQM” are to Sociedad Química y Minera de Chile S.A., an open stock corporation (sociedad anónima abierta) organized under the laws of the Republic of Chile, and its consolidated subsidiaries.
All references to “US$,” “U.S. dollars,” “USD” and “dollars” are to United States dollars, references to “pesos,” “CLP” and “Ch$” are to Chilean pesos, references to ThUS$ are to thousands of United States dollars, references to ThCh$ are to thousands of Chilean pesos and references to “UF” are to Unidades de Fomento. The UF is an inflation-indexed, peso-denominated unit that is linked to, and adjusted daily to reflect changes in, the previous month’s Chilean consumer price index. As of December 31, 2022, UF 1.00 was equivalent to US$41.02 and Ch$35,110.98 according to the Chilean Central Bank (Banco Central de Chile). As of March 1, 2023, UF 1.00 was equivalent to US$42.80 and Ch$35,519.79.
The Republic of Chile is governed by a democratic government, organized in fifteen regions plus the Metropolitan Region (surrounding and including Santiago, the capital of Chile). Our production operations are concentrated in northern Chile, specifically in the Tarapacá Region and in the Antofagasta Region.
We use the metric system of weights and measures in calculating our operating and other data. The United States equivalent units of the most common metric units used by us are as shown below:
1 kilometer equals approximately 0.6214 miles
1 meter equals approximately 3.2808 feet
1 centimeter equals approximately 0.3937 inches
1 hectare equals approximately 2.4710 acres
1 metric ton (“MT” or “metric ton”) equals 1,000 kilograms or approximately 2,205 pounds.
We are not aware of any independent, authoritative source of information regarding sizes, growth rates or market shares for most of our markets. Accordingly, the market size, market growth rate and market share estimates contained herein have been developed by us using internal and external sources and reflect our best current estimates. These estimates have not been confirmed by independent sources.
Percentages and certain amounts contained herein have been rounded for ease of presentation. Any discrepancies in any figure between totals and the sums of the amounts presented are due to rounding.
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GLOSSARY
“assay values” Chemical result or mineral component amount contained by the sample.
“average global metallurgical recoveries” Percentage that measures the metallurgical treatment effectiveness based on the quantitative relationship between the initial product contained in the mine-extracted material and the final product produced in the plant.
“average mining exploitation factor” Index or ratio that measures the mineral exploitation effectiveness, based on the quantitative relationship between (in-situ mineral minus exploitation losses) / in-situ mineral.
“CAGR” Compound annual growth rate, the year over year growth rate of an investment over a specified period of time.
“cash and cash equivalents” The International Accounting Standards Board (IASB) defines cash and cash equivalents as short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
“CCHEN” The Chilean Nuclear Energy Commission (Comisión Chilena de Energía Nuclear).
“Controller Group” * A person or company or group of persons or companies that according to Chilean law, have executed a joint performance agreement, that have a direct or indirect share in a company’s ownership and have the power to influence the decisions of the company’s management.
“Corfo” Production Development Corporation (Corporación de Fomento de la Producción), formed in 1939, a Chilean national organization in charge of promoting Chile’s manufacturing productivity and commercial development.
“CMF” The Chilean Financial Market Commission. (La Comisión para el Mercado Financiero).
“cut-off grade” The minimal assay value or chemical amount of some mineral component above which exploitation is economical.
“dilution” Loss of mineral grade because of contamination with barren material (or waste) incorporated in some exploited ore mineral.
“exploitation losses” Amounts of ore mineral that have not been extracted in accordance with exploitation designs.
“fertigation” The process by which plant nutrients are applied to the ground using an irrigation system.
“geostatistical analysis” Statistical tools applied to mining planning, geology and geochemical data that allow estimation of averages, grades and quantities of mineral resources and reserves.
“heap leaching” A process whereby minerals are leached from a heap, or pad, of ROM (run of mine) ore by leaching solutions percolating down through the heap and collected from a sloping, impermeable liner below the pad.
“horizontal layering” Rock mass (stratiform seam) with generally uniform thickness that conform to the sedimentary fields (mineralized and horizontal rock in these cases).
“hypothetical resources” Mineral resources that have limited geochemical reconnaissance, based mainly on geological data and sample assay values spaced between 500–1000 meters.
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“Indicated Mineral Resource” ** That part of a mineral resource with a level of geological confidence between that of measured and inferred resources; quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.
“Inferred Mineral Resource” ** That part of a mineral resource with the lowest level of geological confidence; quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability.
“industrial crops” Refers to crops that require processing after harvest in order to be ready for consumption or sale. Tobacco, tea and seed crops are examples of industrial crops.
“Kriging Method” A technique used to estimate ore reserves, in which the spatial distribution of continuous geophysical variables is estimated using control points where values are known.
“LIBOR” London Inter Bank Offered Rate.
“limited reconnaissance” Low or limited level of geological knowledge.
“Measured Mineral Resource” ** That part of a mineral resource with the highest level of geological confidence; quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit.
“metallurgical treatment” A set of chemical and physical processes applied to the caliche ore and to the salar brines to extract their useful minerals (or metals).
“Mineral Reserve” ** An estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
“Mineral Resource” ** A concentration or occurrence of material of economic interest in or on the earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
“ore depth” Depth of the mineral that may be economically exploited.
“ore type” Main mineral having economic value contained in the caliche ore (sodium nitrate or iodine).
“ore” A mineral or rock from which a substance having economic value may be extracted.
“Probable Mineral Reserve” ** The economically mineable part of an indicated and, in some cases, a measured mineral resource.
“Proven Mineral Reserve” ** The economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource.
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“solar salts” A mixture of 60% sodium nitrate and 40% potassium nitrate used in the storage of thermo-energy.
“vat leaching” A process whereby minerals are extracted from crushed ore by placing the ore in large vats containing leaching solutions.
“waste” Rock or mineral which is not economical for metallurgical treatment.
“Weighted average age” The sum of the product of the age of each fixed asset at a given facility and its current gross book value as of December 31, 2022 divided by the total gross book value of the Company’s fixed assets at such facility as of December 31, 2022.
* | The definition of a Controller Group that has been provided is the one that applied to the Company. Chilean law provides for a broader definition of a “controller group”, as such term is defined in Title XV of Chilean Law No. 18,045. (Ley de Mercado de Valores or the “Securities Market Law”) |
** | The definitions we use for resources and reserves are as defined in subpart 1300 of SEC Regulation S-K. |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Form 20-F contains statements that are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not based on historical facts and reflect our expectations for future events and results. Words such as “believe,” “expect,” “predict,” “anticipate,” “intend,” “estimate,” “should,” “may,” “likely,” “could” or similar expressions may identify forward-looking information. These statements appear throughout this Form 20-F and include statements regarding the intent, belief or current expectations of the Company and its management, including but not limited to any statements concerning:
● | trends affecting the prices and volumes of the products we sell and the effects on our results; |
● | level of reserves, quality of the ore and brines, and production levels and yields; |
● | our capital investment program and financing sources |
● | our Sustainable Development Plan; |
● | development of new products, anticipated cost synergies and product and service line growth; |
● | our business outlook, future economic performance, anticipated profitability, revenues, expenses, or other financial items; |
● | the future impact of competition; and |
● | regulatory changes. |
Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements included in this Form 20-F, including, without limitation, the information under “Item 4. Information on the Company,” “Item Number 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk.” Factors that could cause actual results to differ materially include, but are not limited to:
● | volatility of global prices for our products; |
● | political, economic and demographic developments in certain emerging market countries, where we conduct a large portion of our business; |
● | the impact of the global COVID-19 pandemic, including any new strain and any associated economic downturn on our future operating and financial performance; |
● | changes in production capacities; |
● | the nature and extent of future competition in our principal markets; |
● | our ability to implement our capital expenditures program, including our ability to obtain financing when required; |
● | changes in raw material and energy prices; |
● | currency and interest rate fluctuations; |
● | risks relating to the estimation of our reserves; |
● | changes in quality standards or technology applications; |
● | adverse legal, regulatory or labor disputes or proceedings; |
● | changes in governmental regulations; |
● | a potential change of control of our company; and |
● | additional risk factors discussed below under Item 3. “Key Information—Risk Factors." |
vii
PART I
ITEM 4.INFORMATION ON THE COMPANY
4.A. History and Development of the Company
Historical Background
Sociedad Química y Minera de Chile S.A. is an open stock corporation organized under the laws of the Republic of Chile. We were constituted by public deed issued on June 17, 1968 by the Notary Public of Santiago, Mr. Sergio Rodríguez Garcés. Our existence was approved by Decree No. 1,164 of June 22, 1968 of the Ministry of Finance, and we were registered on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 No. 1,992. Our headquarters is located at El Trovador 4285, Fl. 6, Las Condes, Santiago, Chile. Our telephone number is +56 2 2425-2000. We are legally referred to by our full name Sociedad Química y Minera de Chile S.A. as well as commercially by the abbreviated name “SQM.” Our Website is www.sqm.com. The information contained on or linked from our website is not included as part of, or incorporated by reference into this report. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, such as our company, at www.sec.gov.
We were formed in 1968 through a joint venture between Compañía Salitrera Anglo Lautaro S.A. (“Anglo Lautaro”) and Corfo, a Chilean government entity. In 1971, Anglo Lautaro sold all of its shares to Corfo, and we were wholly owned by the Chilean government until 1983. In 1983, Corfo began a process of privatization by selling our shares to the public and subsequently listing such shares on the Santiago Stock Exchange. By 1988, all of our shares were publicly owned. Our ADSs have traded on the NYSE under the ticker symbol “SQM” since 1993. Each ADS represents one Series B common share. We have from time to time accessed international capital markets for the issuance of additional ADSs, including our US$1.1 billion capital increase in 2021.
Since our inception, we have produced nitrates and iodine, which are obtained from the caliche ore deposits in northern Chile. In 1985, we began to use heap leaching processes to extract nitrates and iodine, and in 1986 we started to produce potassium nitrate at our Coya Sur facility. Between 1994 and 1999, we invested approximately US$300 million in the development of the Salar de Atacama project in northern Chile, which has enabled us to produce potassium chloride, lithium carbonate, lithium hydroxide, potassium sulfate and boric acid.
From 2000 through 2004, we principally consolidated the investments carried out in the preceding five years. We focused on reducing costs and improving efficiencies throughout the organization.
Starting in 2005, we began strengthening our leadership position in our core businesses through a combination of capital expenditures and advantageous acquisitions and divestitures.
Our capital expenditure program has allowed us to add new products to our product lines and increase the production capacity of our existing products. In 2005, we started production of lithium hydroxide at a plant in the Carmen Lithium production facility, near the city of Antofagasta in the north of Chile. In 2007, we completed the construction of a new prilling and granulating plant for nitrates in Coya Sur. In 2011, we completed expansions of our lithium carbonate capacity, achieving 48,000 metric tons of capacity per year. Since 2010, we have continued to expand our production capacity of potassium products in our operations in the Salar de Atacama. In 2011, we completed the construction of a new potassium nitrate facility in Coya Sur, increasing our overall production capacity of potassium nitrate by 300,000 metric tons per year. In 2013, we completed expansions in the production capacity of our iodine plants in Nueva Victoria. Our capital expenditure program also includes exploration for metallic minerals. Our exploration efforts have led to discoveries that in some cases may result in sales of the discovery and the generation of royalty income in the future. Within this context, in 2013 we sold our royalty rights to the Antucoya mining project to Antofagasta Minerals.
In 2014, we invested in the development of new extraction sectors and production increases in both nitrates and iodine at Nueva Victoria, reaching an approximate iodine production capacity (including the Iris facility) of 8,500 metric tons per year at the facility.
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In 2015, we focused on increasing the efficiency of our operations. Within this context, we announced a plan to restructure our iodine and nitrate operations. In an effort to take advantage of our highly efficient production facilities at our Nueva Victoria site, we decided to suspend the mining and nitrate operations and reduce iodine production at our Pedro de Valdivia site. During 2017, we increased our iodine production capacity at Nueva Victoria to approximately 10,000 metric tons per year. We continued expanding our iodine capacity in 2018, which, including Pedro de Valdivia and Nueva Victoria, reached approximately 14,000 metric tons per year.
In 2016, we entered into a 50/50 joint venture with Lithium Americas to develop the Minera Exar lithium project in Caucharí-Olaroz in the Jujuy province of Argentina. Our interest was sold to Ganfeng Lithium Netherlands Co., BV in 2018. Ganfeng is responsible for a US$50 million deferred payment to us if certain sales goals are met by the project. In 2016, we also made a capital contribution of US$20 million to Elemental Minerals Limited (“Elemental Minerals”), an Australian based company whose main assets are various potassium deposits in the Republic of Congo.
In 2017, we entered into a 50/50 joint venture with respect to the Mt. Holland lithium project to design, construct and operate a mine, concentrator and refinery for the production of lithium hydroxide.
On September 23, 2019, Wesfarmers Limited (“Wesfarmers”) acquired all the issued ordinary shares in our joint venture partner and became a 50% partner in the Mt. Holland lithium project in the joint venture with SQM Australia Pty.
In October 2020, we announced our Sustainable Development Plan, which includes voluntarily expanding our monitoring systems, promoting better and more meaningful conversations with neighboring communities, becoming carbon neutral and reducing water by 65% and brine extraction by 50%. As part of this plan, we also set a goal to obtain international certifications and participate in international sustainability indices.
In 2021, in the Salar de Atacama, we began preparing an external audit in IRMA’s rigorous responsible mining certification process.
On February 16, 2021, our Board approved the investment of approximately US$700 million for our 50% share of the development costs of the Mt. Holland lithium hydroxide project in the joint venture with Wesfarmers. During 2021, our lithium carbonate production in Chile reached an effective capacity of 120,000 metric tons.
In November 2021, we were accepted into the Dow Jones Sustainability Chile and the Dow Jones Sustainability MILA Pacific Alliance Indices for the second year in a row.
In 2022, we completed our lithium carbonate and lithium hydroxide expansion projects in Chile, increasing production capacity to 180,000 metric tons and 30,000 metric tons, respectively. We also began the overhaul of a lithium hydroxide plant in China which we will feed with lithium sulfate from Chile. In line with our sustainability goals, during 2022, we continued with the IRMA certification process and completed the on-site certification audit (phase 2) in the Salar de Atacama operation. We expect to receive the final report in the coming months. Additionally, we participated in the Dow Jones Sustainability Indices (DJSI) assessment and were accepted into the MILA and Chile indices for the third consecutive year and were included in the Sustainability Yearbook 2023. We evaluated ourselves in Carbon Disclosure Project (CDP) where we obtained a category B rating, which is in the management band, higher than the South American region average (category C) and higher than the Chemicals sector average (category B-). We completed phase 2 of the ISO 14001 and 45001 certification process in the Salar de Atacama and the Carmen chemical plant, and continued with the implementation process of ISO 50001 in the Salar de Atacama and Nueva Victoria to support decarbonization goals associated with energy management systems.
We regularly review different opportunities to improve our production methods, reduce costs, increase production capacity of existing products and develop new products and markets. Additionally, significant capital expenditures are required every year in order to sustain our production capacity. We are focused on developing new products in response to identified customer demand, as well as new products that can be derived as part of our existing production or other products that could fit our long-term development strategy. Our capital expenditures in Chile have been mainly related to the organic growth and sustainability of our business, including the construction of new facilities and the renovation of plants and equipment. In 2022, we also worked on the expansion of our lithium carbonate and lithium hydroxide capacity in Chile,
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which reached 180,000 metric tons and 30,000 metric tons respectively, by the end of 2022. We also began expansions related to the mining and production facilities of nitrates and iodine in Chile and lithium hydroxide in Western Australia.
Our capital expenditures for the years ended December 31, 2022, 2021 and 2020 were as follows:
(in millions of US$) |
| 2022 |
| 2021 |
| 2020 |
Capital expenditures |
| 905.2 |
| 464.7 |
| 322.2 |
During 2022, we had total capital expenditures of US$905.2 million. Our 2022 capital expenditure was primarily related to:
● | Capacity expansion projects related to the completion of our increase of our lithium carbonate production in Chile from 120,000 metric tons per year to 180,000 metric tons per year by the end of 2022; |
● | Completion of capacity expansion of lithium hydroxide production in Chile from 21,500 metric tons per year to 30,000 metric tons per year; |
● | Investment in our new 50,000 metric ton Mt. Holland lithium hydroxide mine and refining plant in Western Australia; |
● | Acquisition of the 20,000 metric ton lithium hydroxide refining plant in China; and |
● | Investment in the development of new caliche projects to optimize the iodine and nitrate production plants and carry out general maintenance of all production facilities, among others. |
During 2021, we had total capital expenditures of US$464.7 million. Our 2021 capital expenditure was primarily related to:
● | Capacity expansion projects related to the completion of our increase of our lithium carbonate production in Chile from 70,000 metric tons per year to 120,000 metric tons per year by the end of 2021 and investment in further lithium carbonate production capacity expansion from 120,000 to 180,000 metric tons per year in 2022; |
● | Completion of capacity expansion of lithium hydroxide production in Chile from 13,500 metric tons per year to 21,500 metric tons per year and commencement of a further expansion of lithium hydroxide production capacity in Chile from 21,500 metric tons per year to 30,000 metric tons per year in 2022; |
● | Investment in our new 50,000 metric ton Mt. Holland lithium hydroxide facility in Western Australia; |
● | Optimization projects related to iodine production plants in Nueva Victoria; and |
● | General maintenance of all production units in order to ensure the fulfillment of production and sales targets. |
During 2020, we had total capital expenditures of US$322.2 million, a decrease compared to the US$450 million that was originally expected as a result in the delay of the purchasing of equipment. Our 2020 capital expenditure was primarily related to:
● | Capacity expansion projects related to the increase of our lithium carbonate production in Chile from 70,000 metric tons per year to 120,000 metric tons per year; |
● | Capacity expansion of lithium hydroxide production in Chile from 13,500 metric tons per year to 21,500 metric tons per year; |
● | Optimization projects related to potassium nitrate production plants in Coya Sur; and |
● | General maintenance of all production units in order to ensure the fulfillment of production and sales targets. |
We believe that our capital expenditures for 2023 could reach approximately US$1.2 billion focused on the increase of our production capacity, primarily related to lithium carbonate and lithium hydroxide capacity expansions and nitrates and iodine capacity in Chile, and development of our Mt. Holland lithium hydroxide project in Australia, as well as the maintenance of our production facilities in order to strengthen our ability to meet our production goals. We expect our installed capacity of lithium carbonate and lithium hydroxide in Chile to reach approximately 210,000 and 40,000 metric tons, respectively, during 2024. We will also continue to invest in the construction of our Mt. Holland lithium project in Western Australia and with the adjustments necessary to produce lithium hydroxide from lithium sulfate in China.
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We expect our capital expenditure for the 2023-2025 period to reach approximately US$3.4 billion, including maintenance. As we continue with lithium capacity expansion in Chile, we expect to invest approximately US$1.4 billion to increase our lithium capacity to 210,000 metric tons, including 100,000 metric tons of lithium hydroxide capacity. Our investment in the Mt. Holland project during this period is expected to be close to US$450 million. Nitrates and iodine capacity expansion will require a total capex of approximately US$1.2 billion, including maintenance. Maintenance capex during this period is expected to be approximately US$180 million per annum.
4.B. Business Overview
The Company
We believe that we are the world’s largest producer of potassium nitrate and iodine and one of the world’s largest lithium producers. We also produce specialty plant nutrients, iodine derivatives, lithium derivatives, potassium chloride, potassium sulfate and certain industrial chemicals (including industrial nitrates and solar salts). Our products are sold in approximately 110 countries through our worldwide distribution network, with 98% of our sales in 2022 derived from countries outside Chile.
Our products are mainly derived from mineral deposits found in northern Chile. We mine and process caliche ore and brine deposits. The caliche ore in northern Chile contains the only known nitrate and iodine deposits in the world and is the world’s largest commercially exploited source of natural nitrates. The brine deposits of the Salar de Atacama, a salt-encrusted depression in the Atacama Desert in northern Chile, contain high concentrations of lithium and potassium as well as significant concentrations of sulfate and boron.
From our caliche ore deposits, we produce a wide range of nitrate-based products used for specialty plant nutrients and industrial applications, as well as iodine and iodine derivatives. At the Salar de Atacama, we extract brines rich in potassium, lithium, sulfate and boron in order to produce potassium chloride, potassium sulfate, lithium solutions and bischofite (magnesium chloride). We produce lithium carbonate and lithium hydroxide at our plant near the city of Antofagasta, Chile, from the solutions brought from the Salar de Atacama. We market all of these products through an established worldwide distribution network.
Our products are divided into six categories: specialty plant nutrients; iodine and its derivatives; lithium and its derivatives; potassium chloride and potassium sulfate; industrial chemicals and other commodity fertilizers. Specialty plant nutrients are premium fertilizers that enable farmers to improve yields and the quality of certain crops. Our main specialty fertilizer is potassium nitrate, which is used primarily in high-value crops. Iodine and its derivatives are mainly used in the X-ray contrast media and biocides industries and in the production of polarizing film, which is an important component in LCD screens. Lithium and its derivatives are mainly used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity fertilizer that is produced and sold by us worldwide. Potassium sulfate is a specialty fertilizer used primarily in crops such as vegetables, fruits and industrial crops. Industrial chemicals have a wide range of applications in certain chemical processes such as the manufacturing of glass, explosives and ceramics. Industrial nitrates are also being used in concentrated solar power plants as a means for energy storage. In addition, we complement our product portfolio through the buying and selling of other fertilizers in Chile and around the world.
For the year ended December 31, 2022, we had revenues of US$10,720.6 million, gross profit of US$5,736.6 million and profit attributable to controlling interests of US$3,906.3 million. Our worldwide market capitalization as of December 31, 2022 was approximately US$21.5 billion.
Specialty Plant Nutrition: We produce four main types of specialty plant nutrients which offer nutritional solutions for fertigation, direct soil and foliar fertilizer applications: potassium nitrate, sodium nitrate, sodium potassium nitrate and specialty blends. We also sell other specialty fertilizers including third party products. All of these products are used in either solid or liquid form mainly on high value crops such as fruit, flowers and some vegetables. These fertilizers are widely used in crops that use modern agricultural techniques such as hydroponics, greenhouses and crops with foliar application and fertigation (in the latter case, the fertilizer is dissolved in water before irrigation).
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Specialty plant nutrients have certain advantages over commodity fertilizers, such as rapid and effective absorption (without requiring nitrification), superior water solubility, increased soil pH (which reduces soil acidity) and low chloride content. One of the most important products in this business line is potassium nitrate, which is sold in crystalline or prill form, allowing for different application methods. Crystalline potassium nitrate products are ideal for application by fertigation and foliar applications, and potassium nitrate prills are suitable for direct soil applications.
We have developed brands for marketing according to the different applications and uses of our products. Our main brands are: Ultrasol® (fertigation), Qrop® (soil application), Speedfol® (foliar application) and Allganic® (organic agriculture).
The new needs of more sophisticated customers demand that the industry provide integrated solutions rather than individual products. Our products, including customized specialty blends that meet specific needs along with the agronomic service provided, allow us to create plant nutrition solutions that add value to crops through higher yields and better-quality production. Because our products are derived from natural nitrate compounds or natural potassium brines, they have certain advantages over synthetically produced fertilizers. One of the advantages of our products is the presence of certain beneficial trace elements, which makes them more valuable for customers who prefer products of natural origin. As a result, specialty plant nutrients are sold at a premium price compared to commodity fertilizers.
Iodine and its Derivatives: We believe that we are the world’s leading producer of iodine and iodine derivatives, which are used in a wide range of medical, pharmaceutical, agricultural and industrial applications, including x-ray contrast media, polarizing films for LCD and LED, antiseptics, biocides and disinfectants, in the synthesis of pharmaceuticals, electronics, pigments and dye components.
Lithium and its Derivatives: We are a leading producer of lithium carbonate, which is used in a variety of applications, including electrochemical materials for batteries used in electric vehicles, portable computers, tablets, cellular telephones and electronic apparatus, frits for the ceramic and enamel industries, heat-resistant glass (ceramic glass), air conditioning chemicals, continuous casting powder for steel extrusion, pharmaceuticals and lithium derivatives. We are also a leading supplier of lithium hydroxide, which is primarily used as an input for the lubricating greases industry and for cathodes for high energy capacity batteries.
Potassium: We produce potassium chloride and potassium sulfate from brines extracted from the Salar de Atacama. Potassium chloride is a commodity fertilizer used to fertilize a variety of crops including corn, rice, sugar, soybean and wheat. Potassium sulfate is a specialty fertilizer used mainly in crops such as vegetables, fruits and industrial crops.
Industrial Chemicals: We produce and sell three industrial chemicals: sodium nitrate, potassium nitrate and potassium chloride. Sodium nitrate is used primarily in the production of glass, explosives, and metal treatment, metal recycling and the production of insulation materials, among other uses. Potassium nitrate is used in the manufacturing of specialty glass, and it is also an important raw material for the production of frits for the ceramics, enamel industries, metal treatment and pyrotechnics. Solar salts, a combination of potassium nitrate and sodium nitrate, are used as a thermal storage medium in concentrated solar power plants. Potassium chloride is a basic chemical used to produce potassium hydroxide, and it is also used as an additive in oil drilling as well as in food processing, among other uses.
Other Products and Services: We also sell other fertilizers and blends, some of which we do not produce. We are the largest company that produces and distributes the three main potassium sources: potassium nitrate, potassium sulfate and potassium chloride.
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The following table shows the percentage breakdown of our revenues for 2022, 2021 and 2020 according to our product lines:
| 2022 |
| 2021 |
| 2020 |
| |
Specialty Plant Nutrition |
| 11 | % | 32 | % | 39 | % |
Iodine and Derivatives |
| 7 | % | 15 | % | 18 | % |
Lithium and Derivatives |
| 76 | % | 33 | % | 21 | % |
Potassium |
| 4 | % | 15 | % | 12 | % |
Industrial Chemicals |
| 2 | % | 5 | % | 9 | % |
Other |
| 0 | % | 1 | % | 1 | % |
Total |
| 100 | % | 100 | % | 100 | % |
Business Strategy
SQM is a global company that develops and produces diverse products for several industries essential for human progress, such as health, nutrition, renewable energy and technology through innovation and technological development. We aim to maintain our leading world position in the lithium, potassium nitrate, iodine and thermo-solar salts markets by:
● | Ensuring access to the best assets related to our current business lines by expanding our global presence; |
● | Actively searching for attractive minerals allowing us diversification opportunities to replicate and expand our existing mining capacities; |
● | Strengthening our operational, logistical and commercial excellence process from beginning to end, while looking to be a cost leader; and |
● | Maintaining a conservative financial policy which allows us to successfully endure economic cycles that could impact the markets in which we sell. |
We are a dynamic company. In pursuit of our objectives, we expect to acquire and develop projects and interests that are consistent with our existing and new businesses, either alone or with joint venture partners. We may also divest or sell-down interests that we have acquired to deploy funds for other investments or other purposes in pursuit of our objectives or to adjust risk or diversify our asset base.
We are a company built and managed by a culture based on excellence, safety, sustainability and integrity. We work every day to expand this culture through the attraction, retention and development of talent as well encouraging an inclusive and diverse work environment ensuring the unique knowledge and innovation needed to sustain our business. We strive for safe and accident-free operations by promoting conduct that favors the physical safety and psychological well-being of everyone who works directly and indirectly with our company.
We position ourselves as leaders in sustainability and commit to a sustainable future where we constantly work to responsibly manage natural resources, protect human rights, care for the environment, form close and trusting relationships with our neighboring communities and create value. Within these communities, we support projects and activities with a focus on education, business development, and protection of the environment and historical heritage. We create value for our clients through established commercial models and the production and development of differentiated products that respond to their industry and market specific needs, constantly creating and providing a sustainable improvement in the quality of life. We will continue to create value for all of our stakeholders through responsible management of natural resources, sustainable expansion projects and improvement of our existing operations, with a focus on minimizing our environmental impacts by reducing our carbon, energy and water footprints and working together with our shareholders, employees, customers, suppliers and communities.
Specialty Plant Nutrition
Our strategy in our specialty plant nutrition business is to: (i) leverage the advantages of our specialty products over commodity-type fertilizers; (ii) selectively expand our business by increasing our sales of higher margin specialty plant nutrients based on potassium and natural nitrates, particularly soluble potassium nitrate and specialty blends; (iii) pursue investment opportunities in complementary businesses to enhance our product portfolio, increase production, reduce costs,
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and add value to the marketing of our products; (iv) develop new specialty nutrient blends produced in our mixing plants that are strategically located in or near our principal markets in order to meet specific customer needs; (v) focus primarily on the markets where we can sell our plant nutrients in soluble and foliar applications in order to establish a leadership position; (vi) further develop our global distribution and marketing system directly and through strategic alliances with other producers and global or local distributors; (vii) reduce our production costs through improved processes and higher labor productivity so as to compete more effectively and (viii) supply a product with consistent quality according to the specific requirements of our customers.
Iodine and its Derivatives
Our strategy in our iodine business is to: (i) reach and maintain a sufficient market share of the iodine market in order to optimize the use of our available production capacity; (ii) encourage demand growth and promote new iodine uses; (iii) participate in iodine recycling projects through the Ajay-SQM Group (“ASG”); (iv) reduce our production costs through improved processes and higher productivity in order to compete more effectively and (v) supply a product with consistent quality according to the requirements of our customers.
Lithium and its Derivatives
Our strategy in our lithium business is to: (i) strategically allocate our sales of lithium carbonate and lithium hydroxide; (ii) encourage demand growth and promote new lithium uses; (iii) selectively pursue opportunities in the lithium derivatives business by creating new lithium compounds; (iv) reduce our production costs through improved processes and higher productivity in order to compete more effectively; (v) supply a product with consistent quality according to the requirements of our customers; (vi) diversify our operations geographically and jurisdictionally; and (vii) diversifying our asset base or adjusting risk by acquiring new projects and interests (either alone or with joint venture partners), divesting existing projects or selling down our interests in projects.
Potassium
Our strategy in our potassium business is to: (i) offer a portfolio of potassium products, including potassium sulfate, potassium chloride and other fertilizers, to our traditional markets; (ii) have flexibility to offer crystalized (standard) or granular (compacted) form products according to market requirements; (iii) focus on markets where we have logistical advantages and synergies with our specialty plant nutrition business and (iv) supply a product with consistent quality according to the specific requirements of our customers.
Industrial Chemicals
Our strategy in our industrial chemical business is to: (i) maintain our leadership position in the industrial nitrates market; (ii) encourage demand growth in different applications as well as exploring new potential applications; (iii) position ourselves as a long-term, reliable supplier for the thermal storage industry, maintaining close relationships with R&D programs and industrial initiatives; (iv) reduce our production costs through improved processes and higher productivity in order to compete more effectively and (v) supply a product with consistent quality according to the requirements of our customers.
New Business Ventures
We constantly evaluate opportunities that are consistent with our existing and new businesses. We seek to acquire interests in projects both inside and outside of Chile where we believe we have sustainable competitive advantages, and we hope to continue doing so in the future.
In addition, we are actively conducting exploration for metallic minerals in the mining properties we own. If such minerals are found, we may decide to exploit, sell or enter into an association to extract these resources. Our exploration efforts are currently focused on the layer of bedrock that lies beneath the caliche ore that we use as the primary raw material in the production of iodine and nitrates. This bedrock has significant potential for metallic mineralization, particularly copper,
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gold and silver. A significant portion of our mining properties are located in the Antofagasta region of Chile, where many large copper producers operate.
We have an in-house geological exploration team that explores the area directly, identifying drilling targets and assessing new prospects. In 2021, the team has confirmed the existence of high-grade copper and gold mineralization at the Bufalo project, located 120 kilometers east of the city of Antofagasta. The Bufalo project corresponds to a district that hosts several mineralized bodies of copper, copper-gold and copper-gold-silver in which SQM has already drilled nearly 124,000 meters of drilling, using our own diamond and RC drilling machines. We also have a metal business development team that works to engage partners interested in investing in metal exploration within our mining properties. As of February 2023, we had three option agreements in place with three mining companies and private equity firms. We participated in the formation of one joint venture as a result of exercising an option agreement with a junior mining company.
Main Business Lines
Specialty Plant Nutrition
In 2022, specialty plant nutrients revenues increased to US$1,172.3 million, representing 10.9% of our total revenues for that year and a 29.0% increase from US$908.8 million in specialty plant nutrients revenues in 2021. Prices increased approximately 75.7% in 2022.
We believe that we are the world’s largest producer of potassium nitrate. We estimate that our sales accounted for approximately 45% of global potassium nitrate sales for all agricultural uses by volume in 2022.
The following table shows our sales volumes of and revenues from specialty plant nutrients for 2022, 2021 and 2020:
| 2022 |
| 2021 |
| 2020 | |
Sales volumes (Th. MT) |
|
|
|
|
|
|
Sodium nitrate |
| 14.4 |
| 32.1 |
| 25.6 |
Potassium nitrate and sodium potassium nitrate |
| 477.4 |
| 643.6 |
| 575.2 |
Specialty blends (1) |
| 218 |
| 304 |
| 271.3 |
Other specialty plant nutrients (2) |
| 138.1 |
| 174.9 |
| 164.4 |
Total revenues (in US$millions) |
| 1,172.3 |
| 908.8 |
| 701.7 |
(1)Includes Yara’s products sold pursuant to our commercial agreement.
(2)Includes trading of other specialty fertilizers.
Specialty Plant Nutrition: Market
Specialty plant nutrients are sold for various agricultural uses, including but not limited to fertigation in high-value crops (vegetables, fruit trees, flowers, etc.). These fertilizers must be highly soluble and free of impurities in order to be used by means of modern technical irrigation techniques (drip irrigation, micro-sprinkler). Among the specialty plant nutrients for use in fertigation, potassium nitrate is one of the most important fertilizers. Its advantage lies in being chlorine free, high solubility, adequate PH and free of impurities. These advantages allow for a premium price compared to substitute commodity fertilizers such as potassium chloride and sulfate.
Modern irrigation systems are increasingly used with protected crops and in high-value fruit plantations such as greenhouses, tunnels (berries) and shade houses (tomatoes). Specialty nutrients for foliar and granular soil applications in certain high-value niches such as potato and tobacco production.
Specialty plant nutrients have specific characteristics that increase productivity and enhance quality when used on certain crops and soils. The products have significant advantages for certain applications over commodity fertilizers based on other sources of nitrogen and potassium, such as urea and potassium chloride.
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Since 1990, the international market for specialty plant nutrients has grown at a faster rate than the international market for commodity fertilizers. This is mainly due to: (i) the application of new agricultural technologies such as fertigation, hydroponics and greenhouses; (ii) the increase in the cost of land and the scarcity of water, which has forced farmers to improve their yields and reduce water use; and (iii) the increase in demand for higher quality crops.
As an exception, during the year 2022 and due to the strong increase in price, the agricultural soluble potassium nitrate market had a consumption reduction of between 12% and 16%. These estimates do not consider potassium nitrate produced and sold locally in China, and only include net imports and exports.
Specialty Plant Nutrition: Our Products
Potassium nitrate, sodium potassium nitrate, and specialty blends are higher margin products that use sodium nitrate as a feedstock. These products can be manufactured in crystallized or prilled form. Specialty blends are produced using our own specialty plant nutrients and other components at blending plants operated by us or our affiliates and related companies throughout the world.
The advantages of our specialty plant nutrients include that they:
● | are fully water soluble, allowing their more efficient use in hydroponics, fertigation, foliar applications and other advanced agricultural techniques thus reducing the water use associated with cultivating the crops; |
● | are chloride-free, which prevents toxicity in certain crops associated with high levels of chlorine in plant nutrients; |
● | provide nitrogen in nitric form, thereby allowing crops to absorb nutrients faster than they absorb urea- or ammonium-based fertilizers; |
● | do not release hydrogen after application, thereby avoiding increased soil acidity; |
● | possess trace elements, which promote disease resistance in plants; and |
● | are more attractive to customers who prefer products of natural origin. |
Depending on the systems used to apply specialty nutrients, fertilizers can be classified as specialty field fertilizers or water-soluble fertilizers.
Specialty field fertilizers are applied directly to the soil, manually or in a mechanized fashion. Their high solubility levels, lack of chloride and absence of acidic reactions make them particularly advantageous for tobacco, potatoes, coffee, cotton, and certain fruits and vegetables.
Water-soluble fertilizers are specialty nutrients that are delivered to the crops using modern irrigation systems. As these systems feature refined technology, the products used in them must be highly soluble, rich in nutrients, free of impurities and insoluble substances, and with a low salinity index. The leading nutrient in this segment is potassium nitrate, whose optimal balance of nitric nitrogen and chloride-free potassium (the two macronutrients most needed by plants) make it an indispensable source of nutrition for crops that use modern irrigation systems.
Potassium nitrate is widely known to be a vital component in foliar feeding applications, where usage is recommended in order to stave off nutritional deficiencies before the first symptoms appear, correct any deficiencies that arise and prevent physiological stress. This nutrient also helps promote a suitable balance between fruit production and/or growth, and plant development, particularly in crops with physiological disorders.
In addition to potassium nitrate, we produce the following specialty plant nutrients: sodium nitrate, sodium potassium nitrate and specialty blends (containing various combinations of nitrogen, phosphate and potassium and generally known as “NPK blends”).
Specialty Plant Nutrition: Marketing and Customers
In 2022, we sold our specialty plant nutrients in approximately 103 countries and to more than 1,000 customers. None of our customers represented more than 10% of our specialty plant nutrition revenues during 2022, and our ten largest
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customers accounted in the aggregate for approximately 34% of revenues during that period. No supplier accounted for more than 10% of the costs of sales for this business line.
The table below shows the geographical breakdown of our revenues:
Revenues breakdown |
| 2022 |
| 2021 |
| 2020 |
|
North America |
| 42 | % | 35 | % | 35 | % |
Europe |
| 17 | % | 20 | % | 21 | % |
Chile |
| 11 | % | 15 | % | 14 | % |
Central and South America (excluding Chile) |
| 11 | % | 10 | % | 10 | % |
Asia and Others |
| 20 | % | 21 | % | 20 | % |
We sell our specialty plant nutrition products globally mainly through our own worldwide network of commercial offices and distributors.
We have restructured the Qrop products portfolio to include a chloride-free line for direct application to the soil with a variety of specialized formulas and unique mixtures, which make these products highly accurate and quickly available for the plant. We have developed marketing channels, brands (Ultrasol, Champion, Sangral, Qrop, Speedfol), supply chain, and mixing and packaging plants to be able to reach practically the entire world with our products and have a direct presence in the main markets of America, Europe, South Africa, and China.)
During 2022 we continued with the growth in sales of differentiated fertilizers such as Ultrasoline for improved root growth and optimal nitrogen metabolism, ProP for greater efficiency in phosphorus absorption, Prohydric which allows for fertilization and more efficient water use.
We maintain inventory of our specialty plant nutrients in our commercial offices in our main markets in order to facilitate prompt deliveries to customers. Sales are made pursuant to spot purchase orders or short-term contracts.
As part of our marketing strategy, we provide technical and agronomical assistance to our clients. We have specific knowledge resulting from extensive research and numerous studies conducted by our agronomical teams in close contact with producers throughout the world. The solid agronomical knowledge is key for the development of specific formulas and hydroponic and fertigation nutritional plans, which allows us to provide expert advice.
By working closely with our customers, we are able to identify their needs for new products and a possible existence of higher-value-added markets. Our specialty plant nutrients are used on a wide variety of crops, particularly value-added crops, where the use of our products enables our customers to increase yields and achieve a premium price for their products.
Our customers are located in diverse latitudes. Consequently, we do not believe there are any seasonal or cyclical factors that can materially affect the sales of our specialty plant nutrients.
In the Chilean market, we offer a wide range of products developed specifically for the crops grown in the country which require specialty plant nutrients.
We sell local products as well as products imported from different countries around the world.
Specialty Plant Nutrition: Competition
The principal means of competition in the sale of specialty nutrients are product quality, logistics, agronomic service expertise and price.
We believe that we are the world’s largest producer of potassium nitrate for agricultural use. Our potassium nitrate products compete indirectly with specialty and commodity substitutes, which may be used by some customers instead of potassium nitrate depending on the type of soil and crop to which the product will be applied.
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Our sales accounted for approximately 45% of global agricultural potassium nitrate sales by volume during 2022. In the potassium nitrate market, our largest competitor is Haifa Chemicals Ltd. (“Haifa”), in Israel, which is a subsidiary of Trans Resources International Inc. We estimate that sales of agricultural potassium nitrate by Haifa accounted for approximately 22% of total world sales during 2022 (excluding sales by Chinese producers to the domestic Chinese market). Kemapco, a Jordanian producer owned by Arab Potash, produces potassium nitrate in a plant located close to the Port of Aqaba, Jordan. We estimate that sales of agricultural potassium nitrate by Kemapco accounted for approximately 12% of total world sales during 2022.
ACF, another Chilean producer, mainly oriented to iodine production, has produced potassium nitrate from caliche ore and potassium chloride since 2005. In addition, there are several potassium nitrate producers in China, the largest of which are Yuantong and Migao. Most of the Chinese production is consumed by the Chinese domestic market.
Iodine and its Derivatives
We believe that we are the world’s largest producer of iodine. In 2022, our revenues from iodine and iodine derivatives amounted to US$754.3 million, representing 7.0% of our total revenues in that year and an increase from US$437.9 million in 2021. This increase was primarily attributable to slightly higher sales volumes and significantly higher average prices during 2022. Average iodine prices were more than 66.3% higher in 2022 than in 2021. Our sales volumes increased approximately 3.6% in 2022. We estimate that our sales accounted for approximately 33% of global iodine sales by volume in 2022.
The following table shows our total sales volumes and revenues from iodine and iodine derivatives for 2022, 2021 and 2020:
| 2022 |
| 2021 |
| 2020 | |
Sales volumes (Th. MT) |
|
|
|
|
|
|
Iodine and derivatives |
| 12.7 |
| 12.3 |
| 9.7 |
Total revenues (in US$millions) |
| 754.3 |
| 437.9 |
| 334.7 |
Iodine: Market
Iodine and iodine derivatives are used in a wide range of medical, agricultural and industrial applications as well as in human and animal nutrition products. Iodine and iodine derivatives are used as raw materials or catalysts in the formulation of products such as X-ray contrast media, biocides, antiseptics and disinfectants, pharmaceutical intermediates, polarizing films for LCD and LED screens, chemicals, organic compounds and pigments. Iodine is also added in the form of potassium iodate or potassium iodide to edible salt to prevent iodine deficiency disorders.
X-ray contrast media is the leading application of iodine, accounting for approximately 31% of demand. Iodine’s high atomic number and density make it ideally suited for this application, as its presence in the body can help to increase contrast between tissues, organs, and blood vessels with similar X-ray densities. Other applications include pharmaceuticals, which we believe account for 13% of demand; LCD and LED screens, 13%; iodophors and povidone-iodine, 8%; animal nutrition, 8%; fluoride derivatives, 8%; biocides, 5%; nylon, 3%; human nutrition, 3% and other applications, 11%.
During 2022, the demand for iodine increased approximately 2% compared to 2021. Main drivers of this increase were in the X-ray contrast media market, in which demand grew by approximately 6% compared to 2021, mainly due to worldwide growth in the healthcare industry spending during the year and increased accessibility to these types of treatments in emerging economies, mainly China.
Iodine: Our Products
We produce iodine in our Nueva Victoria plant, near Iquique, Chile, and our Pedro de Valdivia plant, close to María Elena, Chile. We have a total production capacity of approximately 14,800 metric tons per year of iodine, including the Iris plant, which is located close to the Nueva Victoria plant.
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Through Ajay SQM Group (“ASG”), we produce organic and inorganic iodine derivatives. ASG was established in the mid-1990s and has production plants in the United States, Chile and France. ASG is one of the world’s leading inorganic and organic iodine derivatives producer.
Consistent with our iodine business strategy, we are constantly working on the development of new applications for our iodine-based products, pursuing a continuing expansion of our businesses and maintaining our market leadership.
We manufacture our iodine and iodine derivatives in accordance with international quality standards and have qualified our iodine facilities and production processes under the ISO 9001:2015 program, providing third party certification of the quality management system and international quality control standards that we have implemented.
Iodine: Marketing and Customers
In 2022, we sold our iodine products in approximately 50 countries to approximately 258 customers, and most of our sales were exports. Two customers each accounted for more than 10% of our iodine revenues in 2022. These two customers accounted for approximately 41% of revenues, and our ten largest customers accounted in the aggregate for approximately 75% of revenues. No supplier accounted for more than 10% of the cost of sales of this business line.
The following table shows the geographical breakdown of our revenues:
Revenues breakdown |
| 2022 |
| 2021 |
| 2020 |
|
North America |
| 19 | % | 23 | % | 27 | % |
Europe |
| 38 | % | 40 | % | 42 | % |
Chile |
| 0 | % | 0 | % | 0 | % |
Central and South America (excluding Chile) |
| 2 | % | 2 | % | 3 | % |
Asia and Others |
| 41 | % | 34 | % | 27 | % |
We sell iodine through our own worldwide network of representative offices and through our sales, support and distribution affiliates. We maintain inventories of iodine at our facilities throughout the world to facilitate prompt delivery to customers. Iodine sales are made pursuant to spot purchase orders or within the framework of supply agreements. Supply agreements generally specify annual minimum and maximum purchase commitments, and prices are adjusted periodically, according to prevailing market prices.
Iodine: Competition
The world’s main iodine producers are based in Chile, Japan and the United States. Iodine is also produced in Russia, Turkmenistan, Azerbaijan, Indonesia and China.
Iodine is produced in Chile from a unique mineral known as caliche ore, whereas in Japan, the United States, Russia, Turkmenistan, Azerbaijan, and Indonesia, producers extract iodine from underground brines that are mainly obtained together with the extraction of natural gas and petroleum. In China, iodine is extracted from seaweed.
Five Chilean companies accounted for approximately 58% of total global sales of iodine in 2022, including SQM, with approximately 33%, and four other producers accounting for the remaining 25%. The other Chilean producers are Atacama Chemical S.A.C. (Cosayach), controlled by the Chilean holding company Inverraz S.A.; ACF Minera S.A., owned by the Chilean Urruticoechea family; Algorta Norte S.A., a joint venture between ACF Minera S.A. and Toyota Tsusho; and Atacama Minerals, which is owned by Chinese company Tewoo.
We estimate that eight Japanese iodine producers accounted for approximately 26% of global iodine sales in 2022, including recycled iodine.
We estimate that iodine producers in the United States accounted for nearly 5% of world iodine sales in 2022.
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Iodine recycling is a growing trend worldwide. Several producers have recycling facilities where they recover iodine and iodine derivatives from iodine waste streams.
We estimate the 17% of the iodine supply comes from iodine recycling. Through ASG or alone, we are also actively participating in the iodine recycling business using iodinated side-streams from a variety of chemical processes in Europe and the United States.
The prices of iodine and iodine derivative products are determined by market conditions. World iodine prices vary depending upon, among other things, the relationship between supply and demand at any given time. Iodine supply varies primarily as a result of the production levels of the iodine producers (including us) and their respective business strategies. Our annual average iodine sales prices increased to approximately US$59 per kilogram in 2022, from the average sales prices of approximately US$36 per kilogram observed in 2021.
Demand for iodine varies depending upon overall levels of economic activity and the level of demand in the medical, pharmaceutical, industrial and other sectors that are the main users of iodine and iodine-derivative products. Certain substitutes for iodine are available for certain applications, such as antiseptics and disinfectants, which could represent a cost-effective alternative to iodine depending on prevailing prices.
The main factors of competition in the sale of iodine and iodine derivative products are reliability, price, quality, customer service and the price and availability of substitutes. We believe we have competitive advantages compared to other producers due to the size and quality of our mining reserves and the available production capacity. We believe our iodine is competitive with that produced by other manufacturers in certain advanced industrial processes. We also believe we benefit competitively from the long-term relationships we have established with our largest customers.
Lithium and its Derivatives
In 2022, our revenues from lithium sales amounted to US$8,152.9 million, representing 76.1% of our total revenues. We believe we are one of the world’s largest producers of lithium carbonate and lithium hydroxide, and we estimate that our sales volumes accounted for approximately 20% of the global lithium chemicals sales volumes.
The following table shows our total sales volumes and revenues from lithium carbonate and its derivatives for 2022, 2021 and 2020:
| 2022 |
| 2021 |
| 2020 | |
Sales volumes (Th. MT) |
|
|
|
|
|
|
Lithium and derivatives |
| 156.8 |
| 101.1 |
| 64.6 |
Total revenues (in US$millions) |
| 8,152.9 |
| 936.1 |
| 383.4 |
Our revenues in 2022 were US$8,152.9 million, a 771% increase from US$936.1 million in 2021, due to higher average prices and higher sales volumes during the year. The average price for 2022 was approximately 462% higher than the average price in 2021. Our sales volumes increased approximately 55% in 2022.
Lithium: Market
The lithium market can be divided into (i) lithium minerals for direct use (a market in which SQM does not participate directly), (ii) basic lithium chemicals, which include lithium carbonate and lithium hydroxide (as well as lithium chloride, from which lithium carbonate may be made), and (iii) inorganic and organic lithium derivatives, which include numerous compounds produced from basic lithium chemicals (a market in which SQM does not participate directly).
Lithium carbonate and lithium hydroxide are principally used to produce the cathodes for rechargeable batteries, taking advantage of lithium’s extreme electrochemical potential and low density. Batteries are the leading application for lithium, accounting for approximately 90% of total lithium demand, including batteries for electric vehicles, which accounted for approximately 70% of total lithium demand in 2022.
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There are many other applications both for basic lithium chemicals and lithium derivatives, such as lubricating greases heat-resistant glass (ceramic glass), chips for the ceramics and glaze industry, chemicals for air conditioning, as well as other pharmaceutical synthesis and metal alloys.
Lithium’s main properties, which facilitate its use in this range of applications, are that it:
● | is the lightest solid metal and element at room temperature; |
● | is low density; |
● | has a low coefficient of thermal expansion; |
● | has high electrochemical potential; and |
● | has a high specific heat capacity. |
During 2022, lithium chemicals demand increased by approximately 43%, reaching approximately 760,000 metric tons. We expect applications related to energy storage to continue driving demand in the coming years.
Lithium: Our Products
We produce lithium carbonate at our Carmen Lithium production facility, near Antofagasta, Chile, from highly concentrated lithium chloride produced in the Salar de Atacama. The annual production capacity of our lithium carbonate plant at the Carmen Lithium production facility is now 180,000 metric tons per year. We are in the process of increasing our production capacity to 210,000 metric tons per year by 2025. We believe that the technologies we use, together with the high concentrations of lithium and the characteristics of the Salar de Atacama, such as high evaporation rate and concentration of other minerals, allow us to be one of the lowest cost producers of lithium worldwide.
We also produce lithium hydroxide at the Carmen Lithium production facility, next to the lithium carbonate operation. The lithium hydroxide facility has a production capacity of 30,000 metric tons per year and we are in the process of increasing this production capacity to 100,000 metric tons per year by 2025. In addition, we are developing the Mt. Holland lithium project in Australia through our joint venture with Wesfarmers, which we expect will have a total production capacity of 50,000 metric tons when completed.
Lithium: Marketing and Customers
In 2022, we sold our lithium products in approximately 41 countries to approximately 198 customers, and most of our sales were to customers outside of Chile. During 2022, 93% of our sales of lithium were in Asia. One customer accounted for approximately 19% of our lithium revenue in 2022. Our ten largest customers accounted in the aggregate for approximately 60% of revenues. One supplier, Corfo, accounted for approximately 80% of the cost of sales of this business line, principally related to the lease payments payable to Corfo under the Corfo Agreements for lithium products produced from the Salar de Atacama. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. See Note 21.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.
The following table shows the geographical breakdown of our revenues:
Revenues breakdown |
| 2022 |
| 2021 |
| 2020 |
|
North America |
| 2 | % | 5 | % | 7 | % |
Europe |
| 5 | % | 8 | % | 13 | % |
Chile |
| 0 | % | 0 | % | 0 | % |
Central and South America (excluding Chile) |
| 0 | % | 1 | % | 0 | % |
Asia and Others |
| 93 | % | 86 | % | 80 | % |
We sell lithium carbonate and lithium hydroxide through our own worldwide network of representative offices and through our sales, support and distribution affiliates. We maintain inventories of these products at our facilities throughout the world to facilitate prompt delivery to customers. Sales of lithium carbonate and lithium hydroxide are made based on spot purchase orders or through different supply contracts. The contracts generally specify minimum and maximum annual
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sales volumes commitments while prices are adjusted periodically based on different price indices established in the market.
Lithium: Competition
Lithium is produced mainly from two sources: (i) concentrated brines and (ii) minerals. During 2022, the main lithium brines producers were Chile, Argentina and China, while the main lithium mineral producers were Australia and China. With total sales of approximately 156,800 metric tons of lithium carbonate and hydroxide, SQM’s market share of lithium chemicals was approximately 20% in 2022. The main competitors in the lithium market with their estimated market share are: Albemarle (16%), Tianqi Lithium Corp. (7%), Jiangxi Ganfeng Lithium Co (6%), Livent Corporation (3%), and Allkem (4%).
Tianqi is also a major shareholder of ours, holding approximately 22.16% of our shares as of March 15, 2023.
We believe that lithium production will continue to increase this decade, in response to an increase in demand growth. A number of new projects to develop lithium deposits has been announced recently. Some of these projects are already in the advanced stages of development and others could materialize in the medium term.
Potassium
In 2022, our potassium chloride and potassium sulfate revenues amounted to US$437.2 million, representing 4.1% of our total revenues and a 4.9% increase compared to 2021, as a result of increased average prices. We estimate that we accounted for less than 1% of global sales of potassium chloride in 2022.
The following table shows our sales volumes of and revenues from potassium chloride and potassium sulfate for 2022, 2021 and 2020:
| 2022 |
| 2021 |
| 2020 | |
Sales volumes (Th. MT) |
|
|
|
|
|
|
Potassium chloride and potassium sulfate |
| 480.5 |
| 893.2 |
| 726.7 |
Total revenues (in US$millions) |
| 437.2 |
| 416.6 |
| 209.3 |
Our revenues in 2022 were US$437.2 million, a 4.9% increase from US$416.6 million in 2021, due to significantly higher prices and higher sales volumes during the year. The average price for 2022 was approximately 95.1% higher than the average prices in 2021. Our sales volumes in 2022 were approximately 46.2% lower than sales volumes reported during 2021.
Potassium: Market
During the last decade, growth in demand for potassium chloride, and for fertilizers in general, has been driven by several key factors, such as a growing world population, higher demand for protein-based diets and less arable land. All of these factors contribute to fertilizer demand growth as a result of efforts to maximize crop yields and use resources more efficiently. We estimate that demand in 2022 reached approximately 61 million metric tons, a decrease from approximately 70 million tons during 2021, mostly as a result of sanctions from product coming from Belarus and Russia.
According to studies prepared by the International Fertilizer Industry Association, cereals account for approximately 45% of world potassium demand, including corn (14%), rice (12%), wheat (16%), soybeans (9%) and sugar (2%). Other uses represented about 47%.
Potassium: Our Product
We produce potassium chloride and potassium sulfate by extracting brines from the Salar de Atacama that are rich in potassium and other salts.
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Potassium chloride differs from our specialty plant nutrition products because it is a commodity fertilizer and contains chloride. We offer potassium chloride in two grades: standard and compacted. Potassium sulfate is considered a specialty fertilizer and we offer this product in soluble grades. Potassium is one of the three macronutrients that a plant needs to develop. Although potassium does not form part of a plant’s structure, it is essential to the development of its basic functions. Potassium chloride is the most commonly used potassium-based fertilizer. It is used to fertilize crops that can tolerate relatively high levels of chloride, and to fertilize crops that are grown under conditions with sufficient rainfall or irrigation practices that prevent chloride from accumulating to excess levels in the rooting systems of the plant.
Some benefits that may be obtained through the use of potassium are:
● | increased yield and quality; |
● | increased production of proteins; |
● | increased photosynthesis; |
● | intensified transport and storage of assimilates; |
● | prolonged and more intense assimilation period; |
● | improved water efficiency; |
● | regulated opening and closure of stomata; and |
● | synthesis of lycopene. |
Potassium chloride is also an important component for our specialty plant nutrition product line, where it is used as a raw material to produce potassium nitrate.
Since 2009, our effective end product capacity has increased to over 2 million metric tons per year, giving us improved flexibility and market coverage.
Potassium: Marketing and Customers
In 2022, we sold potassium chloride and potassium sulfate to approximately 467 customers in approximately 32 countries. One individual customer accounted for more than 10% of our revenues of potassium chloride and potassium sulfate in 2022, representing approximately 11% of our revenues in the business line. We estimate that our ten largest customers accounted in the aggregate for approximately 49% of such revenues. No supplier accounted for more than 10% of the cost of sales of this business line. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. See Note 21.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.
The following table shows the geographical breakdown of our revenues:
Revenues breakdown |
| 2022 |
| 2021 |
| 2020 |
|
North America |
| 16 | % | 14 | % | 19 | % |
Europe |
| 6 | % | 8 | % | 14 | % |
Chile |
| 15 | % | 12 | % | 11 | % |
Central and South America (excluding Chile) |
| 41 | % | 51 | % | 35 | % |
Asia and Others |
| 22 | % | 14 | % | 21 | % |
Potassium: Competition
We estimate that we accounted for approximately 1% of global sales of potassium chloride in 2021. Our main competitors are Nutrien, Uralkali, Belaruskali and Mosaic. We estimate that in 2022, Nutrien accounted for approximately 21% of global sales, Uralkali accounted for approximately 15% of global sales, Mosaic accounted for approximately 13% of global sales and Belaruskali accounted for approximately 10% of global sales.
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Industrial Chemicals
In 2022, our revenues from industrial chemicals were US$165.2 million, representing approximately 1.5% of our total revenues for that year.
The following table shows our sales volumes of industrial chemicals and total revenues for 2022, 2021 and 2020:
| 2022 |
| 2021 |
| 2020 | |
Sales volumes (Th. MT) |
|
|
|
|
|
|
Industrial chemicals |
| 147.0 |
| 174.5 |
| 225.1 |
Total revenues (in US$millions) |
| 165.2 |
| 132.0 |
| 160.6 |
Revenues for industrial chemicals increased to US$165.2 million in 2022 from US$132.0 million in 2021, as a result of higher sales volumes in this business line, which offset lower sales volumes. Sales volumes in 2022 decreased 15.8% compared to sales volumes reported last year, while average prices in the business line increased 48.6% during 2022 compared to average prices reported during 2021.
Industrial Chemicals: Market
Industrial sodium and potassium nitrates are used in a wide range of industrial applications, including the production of glass, ceramics and explosives, metal recycling, insulation materials, metal treatments, thermal solar and various chemical processes.
We are also experiencing a growing interest in using solar salts in thermal storage solutions not related to CSP technology. Due to their proven performance, solar salts are being tested in industrial heat processes and heat waste solutions. These new applications may open new opportunities for solar salts uses in the near future, such as retrofitting coal plants.
Industrial Chemicals: Our Products
We produce and sell three industrial chemicals: sodium nitrate, potassium nitrate and potassium chloride. Sodium nitrate is used primarily in the production of glass, explosives, metal treatment, metal recycling and the production of insulation materials, adhesives, among other uses. Potassium nitrate is used in the manufacturing of specialty glass, and it is also an important raw material for the production of frits for the ceramics, enamel industries, metal treatment and pyrotechnics. Solar salts, a combination of potassium nitrate and sodium nitrate, are used as a thermal storage medium in concentrated solar power plants. Potassium chloride is a basic chemical used to produce potassium hydroxide, and it is also used as an additive in oil drilling and in food processing, among other uses.
In addition to producing sodium and potassium nitrate for agricultural applications, we produce different grades of these products, including prilled grades, for industrial applications. The grades differ mainly in their chemical purity. We have operational flexibility in producing industrial grade nitrates, because they are produced from the same process as their equivalent agricultural grades, needing only an additional step of purification. We may, with certain constraints, shift production from one grade to the other in response to market conditions. This flexibility allows us to maximize yields and to reduce commercial risk. In addition to producing industrial nitrates, we produce, market and sell industrial-grade potassium chloride.
Industrial Chemicals: Marketing and Customers
In 2022, we sold our industrial nitrate products in approximately 58 countries, to approximately 261 customers. One customer accounted for more than 10% of our revenues of industrial chemicals in 2022, accounting for approximately 27.3%, and our ten largest customers accounted in the aggregate for approximately 54.6% of such revenues. No supplier accounted for more than 10% of the cost of sales of this business line. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium
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hydroxide and potassium chloride. See Note 21.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.
The following table shows the geographical breakdown of our revenues for 2022, 2021 and 2020:
Revenues breakdown |
| 2022 |
| 2021 |
| 2020 |
|
North America |
| 36 | % | 23 | % | 15 | % |
Europe |
| 17 | % | 14 | % | 7 | % |
Chile |
| 1 | % | 3 | % | 3 | % |
Central and South America (excluding Chile) |
| 7 | % | 6 | % | 3 | % |
Asia and Others |
| 39 | % | 55 | % | 72 | % |
Our industrial chemical products are marketed mainly through our own network of offices, logistic platforms, representatives and distributors. We maintain updated inventories of our stocks of sodium nitrate and potassium nitrate, classified according to graduation, to facilitate prompt dispatch from our warehouses. We provide support to our customers and continuously work with them to improve our service and quality, together with developing new products and applications for our products.
Industrial Chemicals: Competition
We believe that we are one of the world’s largest producers of industrial sodium nitrate and potassium nitrate. In 2022, our estimated market share by volume for industrial potassium nitrate was 60% and for industrial sodium nitrate was 39% (excluding domestic demand in China and India).
Our competitors in sodium nitrate are mainly based in Europe and Asia, producing sodium nitrate as a by-product of other production processes. In sodium nitrate, BASF AG, a German corporation, and several producers in Eastern Europe and China are competitive since they produce industrial sodium nitrate as a by-product. Our industrial sodium nitrate grades also compete indirectly with substitute chemicals, including sodium carbonate, sodium sulfate, calcium nitrate and ammonium nitrate, which may be used in certain applications in place of sodium nitrate and are available from a large number of producers worldwide.
Our main competitors in the industrial potassium nitrate business are Haifa Chemicals, Kemapco and some Chinese producers, which we estimate had a market share of 9%, 5% and 17%, respectively, in 2022. We estimate that our market share was approximately 60% for 2022.
Producers of industrial sodium nitrate and industrial potassium nitrate compete in the marketplace based on attributes such as product quality, delivery reliability, price, and customer service. Our operation offers both products at high quality and with low cost.
In the industrial potassium chloride market, we are a relatively small producer, mainly focused on supplying regional needs.
Other Products
SQM also derives revenue from the commercialization of third-party fertilizers (specialty and commodity). These fertilizers are traded in large volumes worldwide and are used as raw material for our specialty mixes or to complement our product portfolio. We have developed commercial management, supply, flexibility and inventory management capabilities that allow us to adapt to the changing fertilizer market in which we operate and obtain profits from these transactions.
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Production Process
Our integrated production process can be classified according to our natural resources:
● | caliche ore deposits, which contain nitrates, iodine and potassium; and |
● | brines from the Salar de Atacama, which contain potassium, lithium, sulfate, boron and magnesium. |
Caliche Ore Deposits
Caliche ore deposits are located in the First and Second Regions in northern Chile. During 2022, our mining operations were concentrated in the First Region where we mainly worked in the mining sector Tente en el Aire and in the mining sectors Nueva Victoria Oeste, Norte and Torcaza. The Second Region mining operations at the Pampa Blanca site, the El Toco mine (which is part of the María Elena site) and the Pedro de Valdivia site were suspended in March 2010, November 2013 and November 2015, respectively, in an effort to optimize our production facilities with lower production costs.
Caliche ore is found under a layer of barren overburden in seams with variable thickness from twenty centimeters to four meters, and with the overburden varying in thickness between half a meter and two meters.
Before proper mining begins, the exploration stage is carried out, including complete geological reconnaissance, sampling and drilling caliche ore to determine the quality and characteristics of each deposit. Treatability tests are performed at a pilot plant. Drill-hole samples are properly identified and tested at our chemical laboratories. With the exploration information on a closed grid pattern of drill holes, the ore evaluation stage provides information for mine planning purposes. Mine planning is done on a long-term basis (ten years), medium-term basis (three to five years) and short-term basis (one year). Once all of this information has been compiled, detailed planning for the exploitation of the mine takes place.
The mining process generally begins with bulldozers first removing the overburden in the mining area. This process is followed by an inspection and review of the drill holes before production drilling and blasting occurs to break the caliche seams. The ore is loaded onto off-road trucks, which take it to the leaching heaps to be processed.
During 2022, SQM implemented two continuous mining equipment systems to replace the drilling and blasting process for mining some of the caliche ore and obtaining a smaller ore size (under 6 ½ inches) that allows a better metallurgical recovery.
The run of mine ore is loaded in heaps and leached with water to produce concentrated solutions containing iodine, nitrate and potassium. These solutions are treated at our iodide plants where iodine is extracted through both solvent-extraction and blow out processes. The remaining solutions, which are rich in nitrates and potassium, are subsequently sent to solar evaporation ponds where the solutions are evaporated and after iodide is obtained, nitrate and potassium salts are produced. These concentrated salts are then sent to Coya Sur where they are used to produce potassium nitrate and sodium nitrate.
Caliche Ore-Derived Products
Caliche ore-derived products are sodium nitrate, potassium nitrate, sodium potassium nitrate and iodine.
Sodium Nitrate
During 2022, sodium nitrate for both agricultural and industrial applications was produced from nitrate salts from our mining operations at Sur Viejo and fed to our new crystallization plant located in Coya Sur. Crystallized sodium nitrate is processed at the Coya Sur production plants to produce sodium nitrate and sodium potassium nitrate in different chemical and physical forms, including crystallized and prilled products. Finally, the products are transported by truck to our port facilities in Tocopilla for shipping to customers and distributors worldwide.
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Potassium Nitrate
Potassium nitrate is produced at our Coya Sur facility using a production process developed in-house. The brines generated by the leaching process at Pedro de Valdivia are pumped to Coya Sur’s solar evaporation ponds for a nitrate concentration process. After the nitrate concentration process, the brine is pumped to a conversion plant where potassium salts from the Salar de Atacama and nitrate and potassium salts produced at Nueva Victoria or Coya Sur are added. A chemical reaction begins, transforming sodium nitrate into potassium nitrate and creating formed sodium chloride as a by-product. Depending on the specifications of the required product, it is subjected to an adiabatic or atmospheric cooling process to obtain the required quality.
Our current potassium nitrate production capacity at Coya Sur is approximately 1,300,000 metric tons per year. During 2022, we worked on several initiatives to improve productivity, including the commencement of the construction of a new magnesium abatement plant in Sur Viejo which will allow for high content potassium nitrate salt recovery from potassium salts from the Salar de Atacama. We also began the removal of magnesium in nitrates from Pedro de Valdivia by using high sulfate salts from Pampa Blanca that allow for improved nitrate recovery during the evaporation ponds process.
The potassium nitrate produced at Coya Sur is transported to Tocopilla for shipping and delivery to customers and distributors. All potassium nitrate produced in crystallized or prilled form at Coya Sur has been certified by TÜV-Rheinland under the quality standard ISO 9001:2015.
Sodium Potassium Nitrate
Sodium potassium nitrate is a mixture of approximately two parts sodium nitrate per one part potassium nitrate. We produce sodium potassium nitrate at our Coya Sur prilling facilities using standard, non-patented production methods we have developed. Crystallized sodium nitrate is supplied together with the crystallized potassium nitrate to the prilling plant where it is mixed producing sodium potassium nitrate, which is then melted and prilled. The prilled sodium potassium nitrate is transported to Tocopilla for bulk shipment to customers and distributors.
The core production process for sodium potassium nitrate is basically the same as that for sodium nitrate and potassium nitrate discussed above. With certain production restraints and following market conditions, we may supply sodium nitrate, potassium nitrate or sodium potassium nitrate, either in prilled or crystallized form.
Iodine and Iodine Derivatives
During 2022, we produced iodine at our facilities at Nueva Victoria (including the Iris facility) and Pedro de Valdivia. Iodine is extracted from solutions produced by leaching caliche ore.
As in the case of nitrates, the process of extracting iodine from the caliche ore is well established, but variations in the iodine and other chemical contents of the treated ore and other operating parameters require a high level of know-how to manage the process effectively and efficiently.
The solutions resulting from the leaching of caliche ore carry iodine in iodate form. Part of the iodate solution is reduced to iodide using sulfur dioxide, which is produced by burning sulfur. The resulting iodide is combined with the rest of the untreated iodate solution to release elemental iodine in low concentrations. The iodine is then extracted from the aqueous solutions and concentrated in iodide form using a solvent extraction and stripping plant in the Pedro de Valdivia and Nueva Victoria facilities and using a blow out plant in the Iris facility. The concentrated iodide is oxidized to metallic iodine, which is then refined through a smelting process and prilled. We have obtained patents in the United States and Chile (Chilean patent number 47,080) for our iodine prilling process.
Prilled iodine is tested for quality control purposes, using international standard procedures. It is then packed in 20 to 50-kilogram drums or 350-to-700-kilogram maxi bags and transported by truck to Antofagasta, Mejillones, or Iquique for export. Our iodine and iodine derivatives production facilities have been certified by TÜV-Rheinland under the ISO 9001:2015 program, providing third-party certificationof our quality management system. The last recertification process was approved in November 2020, valid through 2023.
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Our total iodine production in 2022 was 12,350 metric tons predominately from Nueva Victoria. We have the flexibility to adjust our production according to market conditions. Following the production facility restructuring at Pedro de Valdivia and Nueva Victoria, along with the ramp-up of our new iodide plant in Nueva Victoria, our total current production capacity at our iodine production plants is approximately 14,800 metric tons per year, this considers efficiency projects at the Nueva Victoria prilling plant. Currently, all the finished iodine is produced in Nueva Victoria, since production at the Pedro de Valdivia plant has been suspended since November 2021 and will be restarted as more iodine production capacity is needed.
In November 2021, the Tarapacá Environmental Assessment Commission environmentally authorized the Tente en el Aire project, which allows the productive capacities of the Nueva Victoria Faena facility to be increased, incorporating seawater for its processes. This project expects to incorporate the use of up to 900 liters per second of seawater, increasing the mine area and allowing for increased production of iodine and nitrate salts.
In parallel, work is being done on the new Pampa Orcoma project in the Tarapacá Region. This has an approved RCA for 2,500 tons of iodine per year and 320,000 tons of nitrate-rich salts per year, in addition to the use of 200 liters/second of seawater for the leaching operation. Currently, progress is being made with the processing of the necessary permits for its exploitation.
We use a portion of the iodine we produce to manufacture inorganic iodine derivatives, which are intermediate products used for manufacturing agricultural and nutritional applications, at facilities located near Santiago, Chile. We also produce inorganic and organic iodine derivative products together with Ajay, which purchases iodine from us. In the past, we have primarily sold our iodine derivative products in South America, Africa and Asia, while Ajay and its affiliates have primarily sold their iodine derivative products in North America and Europe.
Salar de Atacama Brine Deposits
The Salar de Atacama, located approximately 210 kilometers east of Antofagasta, is a salt-encrusted depression in the Atacama Desert, within which lies an underground deposit of brines contained in porous sodium chloride rock fed by an underground inflow from the Andes mountains, which is the result of millions of years of climatic and tectonic impacts. Brines are pumped from depths of 15 to 150 meters below surface, through a field of wells that are located in the Salar de Atacama, distributed in areas authorized for exploitation, and which contain relatively high concentrations of potassium, lithium, sulfates and other minerals.
The brines are estimated to cover a surface of approximately 2,800 square kilometers and contain commercially exploitable deposits of potassium, lithium, sulfates and boron. Concentrations vary at different locations throughout the Salar de Atacama. Our mining exploitation rights to the Salar de Atacama are pursuant to the Corfo Agreements, which expire in 2030. The Corfo Agreements, as amended in January 2018, permits the CCHEN to establish a total accumulated production and sales limit of up to 349,553 metric tons of lithium metallic equivalent (1,860,671 tons of lithium carbonate equivalent), which is in addition to the approximately 64,816 metric tons of lithium metallic equivalent (345,015 tons of lithium carbonate equivalent) then remaining from the originally authorized amount. See “Item 10.C. Material Contracts – Corfo Agreements.”
For the year ended December 31, 2022, revenues related to products originating from the Salar de Atacama represented 80% of our consolidated revenues, consisting of revenues from our potassium business line and our lithium and derivatives business line for the period. All of our products originating from the Salar de Atacama are derived from our extraction operations under the Corfo Agreements. As of December 31, 2022, only 8 years remain on the term of the Corfo Agreements.
Products Derived from the Salar de Atacama Brines
The products derived from the Salar de Atacama brines are potassium chloride, potassium salts, lithium chloride solutions, lithium carbonate, lithium hydroxide, lithium salts, potassium sulfate, boric acid, sodium chloride and bischofite (magnesium chloride).
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Potassium Chloride
We use potassium chloride in the production of potassium nitrate. Production of our own supplies of potassium chloride provides us with substantial raw material cost savings. We also sell potassium chloride to third parties, primarily as a commodity fertilizer.
In order to produce potassium chloride, brines from the Salar de Atacama are pumped to solar evaporation ponds. Evaporation of the water contained in the brine, results in a crystallized mixture of salts with various content levels of potassium, sodium and magnesium. In the first stage of the evaporation process, sodium chloride salts (halite) precipitate, they are then harvested and removed; these salts have the potential to be used in the copper mining process. In the second stage of the evaporation process, the remaining brine from the first stage is transferred to other evaporation ponds where potassium chloride salts together with sodium chloride (sylvinite) precipitate, these salts are harvested and then sent for treatment at one of the wet potassium chloride plants where potassium chloride is separated by a grinding, flotation, and filtering process. In the final evaporation stage, salts containing magnesium are harvested and treated at one of the cold leach plants where magnesium is removed. Part of the potassium chloride is transported approximately 300 kilometers to our Coya Sur facilities via a dedicated truck transport system, where it is used in the production of potassium nitrate. The use of potassium chloride salts as a raw material in Coya Sur allows us to capture significant savings, as it allows us to use potassium salts with different qualities and to avoid buying and importing potassium chloride from external sources.
The remainder of the potassium chloride produced at the Salar de Atacama is shipped to our port in Tocopilla in either crystalized (standard) or granular (compacted) form and then shipped and sold as a commodity fertilizer to third parties. All of our potassium chloride-related plants in the Salar de Atacama currently have a nominal production capacity of up to 2.6 million metric tons per year. Actual production capacity depends on volume, quality and performance of the salts used in the process and quality of the mining resources pumped from the Salar de Atacama.
The brine that remain in the evaporation pond system after removal of the sodium chloride and potassium chloride generates a concentrated lithium chloride solution, which is used to produce lithium carbonate (as described below) and generates salts rich in magnesium chloride (bischfite) as a by-product.
Lithium Chloride Solution and Lithium Carbonate
After the production and precipitation of the potassium chloride salts, a portion of the solutions remaining is sent to additional solar evaporation ponds adjacent to the potassium evaporation ponds. At this stage, the solution is purified and concentrated by precipitation to remove impurities it may still contain, including calcium, sulfate, potassium, sodium and magnesium, reaching a lithium concentration level of approximately 5-6%. The next step is the process of concentration and purification of the remaining concentrated solution of lithium chloride, which is transported by truck to the Carmen Lithium production facilities located near Antofagasta, approximately 190 kilometers southeast of the Salar de Atacama. At this plant, the solution is further purified and treated with sodium carbonate to produce lithium carbonate, which is dried and then, if necessary, compacted and finally packaged for shipment to customers.
The production capacity of our lithium carbonate facility at the end of 2022 was 180,000 metric tons per year.
Future production will depend on the actual volumes and quality of the lithium solutions sent by the Salar de Atacama operations, as well as prevailing market conditions. Our future production will also be subject to the extraction limit described in the Corfo Agreements mentioned above. See “—Salar de Atacama Brine Deposits” and “Item 8.A.7 Legal Proceedings.”
Our lithium carbonate production quality assurance program has been certified by TÜV-Rheinland under ISO 9001:2015 since September 2018.
Lithium Hydroxide
Lithium carbonate is sold to customers, and we also use it as a raw material for our lithium hydroxide production, which started operations at the end of 2005. We currently have three lithium hydroxide plants, one of which entered into
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operations at the end of March 2022, and have a total production capacity of 30,000 metric tons per year at the end of 2022. These plants are located at the Carmen Lithium production facility, adjacent to our lithium carbonate operations.
In the production process, lithium carbonate is reacted with a lime solution to produce lithium hydroxide brine and calcium carbonate salt. The calcium carbonate salt is removed from the process by filtration and the lithium hydroxide brine is stored in ponds. The brine is then evaporated in a multi-effect evaporator and crystallized to produce lithium hydroxide which is then dried and packaged for shipment to customers.
Our lithium hydroxide production quality assurance program has been certified by TÜV-Rheinland under ISO 9001:2015 since September 2018.
Potassium Sulfate and Boric Acid
Approximately 12 kilometers northeast of the potassium chloride facilities at the Salar de Atacama, we use the brines from the Salar de Atacama to produce potassium sulfate, potassium chloride (as a by-product of the potassium sulfate process) and, depending on market conditions, boric acid. The plant is located in an area of the Salar de Atacama where high sulfate and potassium concentrations are found in the brines to produce potassium sulfate. The brine is pumped to solar evaporation ponds, where sodium chloride salts are precipitated, harvested and put into piles. After further evaporation, the sulfate and potassium salts precipitate in different concentrations and are harvested and sent for processing to the potassium sulfate plant. Potassium sulfate is produced using flotation, concentration and reaction processes, after which it is crystallized, filtered, dried, classified and packaged for shipment.
Production capacity for the potassium sulfate plant is approximately 340,000 metric tons per year, of which approximately 95,000 metric tons correspond to potassium chloride obtained as a by-product of this process. This capacity is part of the total nominal plant capacity of 2.6 million metric tons per year. In our dual plant complex, we may switch, to some extent, between potassium chloride and potassium sulfate production. Part of the pond system in this area is also used to process potassium chloride brines extracted from the low sulfate concentration areas found in the Salar de Atacama. Depending on the conditions for the optimization of the deposit operation and/or market conditions, potassium sulfate production can be modified to produce potassium chloride.
The principal by-products of the production of potassium sulfate are: (i) non-commercial sodium chloride, which is deposited at sites near the production facility and (ii) remaining solutions, which are re-injected into the Salar de Atacama or returned to the evaporation ponds. The principal by-products of the boric acid production process are remaining solutions that are treated with sodium carbonate to neutralize acidity and then are reinjected into the Salar de Atacama.
Raw Materials
The main raw material that we require in the production of nitrate and iodine is caliche ore, which is obtained from our surface mines. The main raw material in the production of potassium chloride, lithium carbonate, lithium hydroxide and potassium sulfate is the brine extracted from our operations at the Salar de Atacama.
Other important raw materials are sodium carbonate (used for lithium carbonate production), calcium oxide, sulfuric acid, hydrochloric acid, kerosene, sulphur, anti-caking and anti-dust agents, calcium oxide, potassium carbonate, ammonium nitrate (used for the preparation of explosives in the mining operations), woven bags for packaging our final products, electricity acquired from electric utilities companies, and liquefied natural gas and fuel oil for heat generation. Our raw material costs (excluding caliche ore and salar brines and including energy) represented approximately 00% of our cost of sales in 2022.
Since 2017, we have been connected to the central grid, which supplies electricity to the majority of cities and industries in Chile. We have several electricity supply agreements signed with major producers in Chile, which are within the contract terms. Our electricity needs are primarily covered by Power Purchase Agreements that we entered into with Empresa Eléctrica Cochrane SpA (an AES affiliate) on December 31, 2012.
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For our supply of liquefied natural gas, we maintain a five-year contract with Engie, which was executed in 2019 and some annual contracts to supply possible increases in demand. In addition, we have a supply of liquefied petroleum gas (LPG) from Lipigas at the Carmen Lithium production facility and the Salar de Atacama.
We obtain ammonium nitrate, sulfuric acid, hydrochloric acid, kerosene, sulphur, calcium oxide and soda ash from several large suppliers, mainly in Chile,,the United States and Europe, under long-term contracts or general agreements, some of which contain provisions for annual revisions of prices, quantities and deliveries. Diesel fuel is obtained under contracts that provide fuel at international market prices.
We believe that all of our contracts and agreements with third-party suppliers with respect to our main raw materials contain standard and customary commercial terms and conditions.
Water Supply
We hold water rights for the supply of surface and subterranean water near our production facilities. The main sources of water for our nitrate and iodine facilities at Pedro de Valdivia, María Elena and Coya Sur are the Loa and San Salvador rivers, which run near our production facilities. Water for our Nueva Victoria and Salar de Atacama facilities is obtained from wells near the production facilities. In addition, we buy water from third parties for our lithium carbonate and lithium hydroxide production processes at the Carmen Lithium production facility, and we also purchase potable water from local utility companies.
We have proposed projects which would allow us to use seawater in the future. These seawater projects could face timing issues, have permits uncertainty which make them difficult to develop and construct.
Government Regulations
Regulations in Chile Generally
We are subject to the full range of government regulations and supervision generally applicable to companies engaged in business in Chile, including labor laws, social security laws, public health laws, consumer protection laws, tax laws, environmental laws, free competition laws, and securities laws. These include regulations to ensure sanitary and safety conditions in manufacturing plants.
We conduct our mining operations pursuant to judicial exploration concessions and exploitation concessions granted pursuant to applicable Chilean law. Exploitation concessions essentially grant a perpetual right (with the exception of the Salar de Atacama rights, which have been leased to us until 2030) to conduct mining operations in the areas covered by such concessions, provided that annual concession fees are paid. Exploration concessions permit us to explore for mineral resources on the land covered thereby for a specified period, and to subsequently request a corresponding exploitation concession.
Under Law No. 16,319 that created the Chilean Nuclear Energy Commission (Comisión Chilena de Energía Nuclear), or “CCHEN”, we have an obligation to the CCHEN regarding the exploitation and sale of lithium from the Salar de Atacama, which prohibits the use of lithium for nuclear fusion. In addition, CCHEN has imposed quotas that limit the total tonnage of lithium authorized to be sold, along with other conditions.
We also hold water use rights granted by the respective administrative authorities and which enable us to have a supply of water from rivers or wells near our production facilities sufficient to meet our current operating requirements. See “Item 3.D. Risk Factors—Risks Relating to Chile—Changes to the Chilean Constitution could impact a wide range of rights, including mining rights and water rights, and could affect our business, results of operations and financial conditions.” and “—Changes in water rights laws and other regulations could affect our operating costs.” The Chilean Constitution, the Water Code and related regulations are subject to change, which could have a material adverse impact on our business, financial conditions and results of operations.
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We operate port facilities at Tocopilla, Chile for the shipment of products and the delivery of raw materials in conformity with maritime concessions, which have been granted by the respective administrative authorities. These concessions are normally renewable on application, provided that such facilities are used as authorized and annual concession fees are paid.
In 2005, Law No. 20,026, known as the “Law to Establish a Specific Tax on Mining Activity” (Ley que Establece un Impuesto Específico a la Actividad Minera) or the “Royalty Law”, established a tax to be applied to mining activities developed in Chile. In 2010, modifications were made to the Royalty Law and taxes were increased.
On February 24, 2020, Law No.21,210 the “Law to Modernize the Tax Legislation” was published. As a result of these reforms, open stock corporations, such as SQM, are subject to the general corporate tax rules. The corporate tax rate that applies to us increased to 27% in 2018.
The Chilean government may again decide to levy additional taxes on mining companies or other corporations in Chile, and such taxes could have a material adverse impact on our business, financial conditions and results of operations.
We are also subject to the Chilean Labor Code and the Subcontracting Law, which are overseen by the Labor Authority (Dirección del Trabajo), the National Geology and Mining Service (Servicio Nacional de Geología y Minería) or “Sernageomin”, and the National Health Service. Recent changes to these laws and their application may have a material adverse effect on our business, financial condition and results of operations. See “Item 3.D. Risk Factors—Risks Relating to Our Business—We are exposed to labor strikes and labor liabilities that could impact our production levels and costs.”
In addition, we are subject to Law No. 20,393, which establishes criminal liability for legal entities, for crimes such as, (a) asset laundering, (b) financing terrorism, (c) bribery and (d) obliging employees to breach sanitary restrictions ordered by the local authorities. Potential sanctions for violations under this law could include (i) fines, (ii) loss of certain governmental benefits during a given period, (iii) a temporary or permanent bar against the corporation executing contracts with governmental entities, and (iv) dissolution of the corporation.
We are subject to the Securities Market Law and Law No. 18,046 on Corporations (Ley de Sociedades Anónimas) or the “Chilean Corporations Act”, which regulates corporate governance of public companies. Specifically, the Chilean Corporations Act regulates, among other things, independent director requirements, disclosure obligations to the general public and to the CMF, as well as regulations relating to the use of inside information, the independence of external auditors, and procedures for the analysis of transactions with related parties. See “Item 6.C. Board Practices” and “Item 7.B. Related Party Transactions.”
Law No. 21,455, which was published in the Official Gazette on June 21, 2022, establishes a legal framework for facing the challenges derived from climate change and complying with the Chilean State’s international commitments regarding such issue. Law No. 21,455, amends the Chilean Corporations Act to recquire open stock corporations registered in the Securities Register to periodically provide information to CMF in connection with the impact of their activities on the environment and climate change.
Law No. 21,521, which was published in the Official Gazette on January 4, 2023, seeks to promote competition and financial inclusion in financial services through innovation and technology. Law No. 21,521 regulates the following financial services: (i) crowdfunding platforms; (ii) alternative systems for the transaction of financial instruments or securities; (iii) credit advice; (iv) investment advice (v) custody of financial instruments; (vi) order routing, and (vii) intermediation of financial instruments. In addition, Law No. 21,521 amends the Chilean Corporations Act to increase by 2,000 (or the higher number determined by the CMF) the number of shareholders that a closed corporation must have to be required to register its shares in the Securities Registry and become an open stock corporation. Law No. 21,521 also amends the Securities Market Law to establish a simplified regime for debt securities, which will be detailed by the CMF.
There are currently no material legal or administrative proceedings pending against us except as discussed under “Item 8.A.7 Legal Proceedings”, in Note 20 to our consolidated financial statements and below under “Safety, Health and Environmental Regulations in Chile.”
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Safety, Health and Environmental Regulations in Chile
Our operations in Chile are subject to both national and local regulations related to safety, health and environmental protection. In Chile, the main regulations on these matters that are applicable to us are the Mine Health and Safety Act of 1989 (Reglamento de Seguridad Minera or the “Mine Health and Safety Act”), the Health Code (Código Sanitario), the Health and Basic Conditions Act of 1999 (Reglamento sobre Condiciones Sanitarias y Ambientales Básicas en los Lugares de Trabajo or the “Health and Basic Conditions Act”), the Subcontracting Law, the Environmental Law of 1994, amended in 2010 (Ley sobre Bases Generales del Medio Ambiente or the “Environmental Law”) and Law No.16,744 of the Labor Code relating to workplace accidents and occupational diseases (“Law No. 16,744”).
Health and safety at work are fundamental aspects in the management of mining operations, which is why we have made constant efforts to maintain good health and safety conditions for the people working at our mining sites and facilities. In addition to the role played by us in this important matter, the Chilean government has a regulatory role, enacting and enforcing regulations in order to protect and ensure the health and safety of workers. The Chilean government, acting through the Ministry of Labor and Social Security, Ministry of Health, and the Sernageomin, performs health and safety inspections at the mining sites and oversees mining projects, among other tasks, and it has exclusive powers to enforce standards related to environmental conditions and the health and safety of the people performing activities related to mining.
The regulations set in Law No. 16744 and the Mine Health and Safety Act protect workers and nearby communities from health and safety hazards. The Health and Basic Conditions Act along with our Internal Mining Standards (Reglamentos Internos Mineros) establish guidelines to maintain a workplace where safety and health risks are managed appropriately. We are subject to the general provisions of the Health and Basic Conditions Act, our own internal standards and the provisions of the Mine Health and Safety Act. In the event of non-compliance, the Ministry of Health and relevant regulatory bodies are entitled to use their enforcement powers to ensure compliance with the law.
In November 2011, the Ministry of Mining enacted Law No. 20,551 that regulates the closure of mining sites and facilities (Ley que Regula el Cierre de Faenas e Instalaciones Mineras). This statute entered became effective in November 2012 and required all mining sites to present or update their closure plans as of November 2014. SQM has fulfilled this requirement for all of its mining sites and facilities. The main requirements of the law are related to disclosures to the Sernageomin regarding decommissioning plans for each mining site and its facilities, along with the estimated cost to implement such plans. The mining site closure plans are approved by Sernageomin and the corresponding financial assurances are subject to approval by the CMF. In both cases, SQM has received the requisite approvals. During 2020, any required closure plans were updated and presented to Sernageomin in accordance with required deadlines. In 2022, updates of the Pedro de Valdivia and Tocopilla sites were approved and the process continued according to the comments received. During 2022, Sernageomin approved the updates to the closure plans of the Salar de Atacama, Carmen lithium chemical plant, Coya Sur, Nueva Victoria and Orcoma. The approval updates for the closure plans of the Pampa Blanca and Maria Elena sites are still pending.
We continuously monitor the impact of our operations on the environment and on the health of our employees and other persons who may be affected by such operations. We have made modifications to our facilities in an effort to eliminate any adverse impacts. Also, over time, new environmental standards and regulations have been enacted, which have required minor adjustments or modifications of our operations. We anticipate that additional laws and regulations will be enacted over time with respect to environmental matters. There can be no assurance that future legislative or regulatory developments will not impose new restrictions on our operations. We are committed to continuously improving our environmental performance through our Environmental Management System (“EMS”).
Since our sustainable development plan was announced, we have participated in voluntary qualifications such as Ecovadis, international certifications such as Responsible Conduct from the Association of Chemical Industries of Chile, Protect&Sustain from the International Fertilizer Association, ISO 14001, ISO 45001 and ISO 50001, and the Standard IRMA Certification Audit, to promote responsible mining.
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In 2021, the Port of Tocopilla was certified for Responsible Conduct, obtaining level 2 certification. Likewise, during 2022, the Nueva Victoria Site was recertified, obtaining level 1 certification. On the other hand, the Protect&Sustain certification applies to the operations of Coya Sur, Salar de Atacama, Antofagasta, Santiago and the Port of Tocopilla.
During 2022, the external IRMA certification audit (phase 2) began in the Salar de Atacama operation, and we expect to receive the final results during 2023.
Regarding the ISO management systems, the Port of Tocopilla was certified in January 2022 in ISO 14001. We completed the phase 2 of ISO 14001 and 45001 certification process in the Salar de Atacama and the Carmen chemical plant, and continued with the implementation process of ISO 50001 in the Salar de Atacama and Nueva Victoria to support decarbonization goals associated with energy management systems.
During 2022, we participated in the Dow Jones Sustainability Indices (DJSI) assessment and were accepted into the MILA and Chile indices for the third consecutive year and were included in the Sustainability Yearbook 2023. We evaluated ourselves in Carbon Disclosure Project (CDP) where we received a category B rating, which is in the management band, higher than the South American region average (category C) and higher than the Chemicals sector average (category B-).
We have submitted and will continue to submit environmental impact assessment studies related to our projects to the governmental authorities. We require the authorization of these submissions in order to maintain and to increase our production capacity.
International Regulations
We are subject to complex regulatory requirements in the various jurisdictions in which we operate, including the following implemented during 2022:
In 2019, Regulation (EU) 2019/1009 was published, which establishes provisions regarding the marketing of fertilizing products and repeals Regulation (EC) No. 2003/2003. Regulation (EU) 2019/1009 entered into force in July 2022 and changed the way fertilizers are placed in the EU market. All products manufactured by SQM in Chile meet the requirements of Regulation (EU) 2019/1009 and the applicable type of conformity assessment has been carried out. We have also evaluated and continue to evaluate if raw materials from third parties for the manufacturing of water soluble NPK formulas produced in The Netherlands and Spain meet the new requirements of Regulation (EU) 2019/1009.
We continue our active participation as a member of the Standing Committee on Precursors of the European Commission, which monitors and assists in the implementation of Regulation (EU) 2019/1148 on the marketing and use of explosive precursors. The invoices and safety data sheets of our products covered by Regulation (EU) 2019/1148 inform of such a condition so that our European users are informed and can take the pertinent measures.
Regulation (EC) 1907/2006 (REACH) is the main framework for chemical’s control in the EU. SQM has acted as lead registrant for four substances: iodine, sodium nitrate, potassium nitrate and urea phosphate. During 2022, the EU REACH iodine dossier was successfully updated, and we continue the process for the other three substances with the aim of updating their dossiers during 2023. At the end of 2022, Commission Regulation (EU) 2020/878 replaced Annex II to REACH introducing changes to safety data sheets, a key hazard communication tool. SQM adjusted its documents to the new format accordingly.
Commission Delegated Regulation (EU) 2021/849 amended Part 3 of Annex VI to Regulation (EC) No 1272/2008 which introduced new concentration limits for boric acid, a micronutrient used in water soluble NPK formulas. This amendment is effective beginning December 2022 and the hazard classification of all formulas containing boric acid were reviewed and updated when needed. Downstream users were all notified accordingly.
In other jurisdictions, in 2022 we continued our work for the registrations of products under other similar chemicals control regulations, including UK REACH, Turkey REACH and Korea REACH.
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In the field of international transport, SQM actively participated through the Chilean Chemical Industry Association in the 36th and 37th meetings of the Editorial and Technical Group and the 8th meeting of the Sub-Committee on Carriage of Cargoes and Containers of the International Maritime Organization (IMO) proposing new entries for potassium nitrate and sodium nitrate in the IMSBC Code and modifications to SP 964 in the IMDG Code.
Research and Development, Patents and Licenses
See “Item 5.C. Research and Development, Patents and Licenses.”
4.C. Organizational Structure
All of our principal operating subsidiaries are essentially wholly owned, except for SQMC, which is approximately 61% owned by us and whose shares are listed and traded on the Santiago Stock Exchange, and Ajay SQM Chile S.A., which is 51% owned by us. The following is a summary of our main subsidiaries as of December 31, 2022.
SQM Beneficial |
| |||
Country of | Ownership Interest | |||
Principal subsidiaries | Activity | Incorporation | (Direct/Indirect) | |
SQM Nitrates S.A. | Extracts and sells caliche ore to subsidiaries and affiliates of SQM | Chile | 100 | % |
SQM Industrial S.A. | Produces and markets SQM’s products directly and through other subsidiaries and affiliates of SQM | Chile | 100 | % |
SQM Salar S.A. | Exploits the Salar de Atacama to produce and market SQM’s products directly and through other subsidiaries and affiliates of SQM | Chile | 100 | % |
SQM Potasios S.A. | Produces and markets SQM’s products directly and through other subsidiaries and affiliates of SQM | Chile | 100 | % |
Servicios Integrates de Transitos y Transferencias S.A. (SIT) | Owns and operates a rail transport system and also owns and operates the Tocopilla port facilities | Chile | 100 | % |
Orcoma Estudios SPA | Holds permits and studies of the Orcoma Project | Chile | 100 | % |
Orcoma SPA | Holds environmental permits and mining tenement of the Orcoma Project | Chile | 100 | % |
Sociedad Contractual Minera Bufalo | Mining exploration | Chile | 100 | % |
RS Agro Chemical Trading Corporation A.V.V. | A finance vehicle | Aruba | 100 | % |
Soquimich Comercial S.A. | Markets SQM’s specialty plant nutrition products domestically and imports fertilizers for resale in Chile | Chile | 61 | % |
Ajay-SQM Chile S.A. | Produces and markets SQM’s iodine and iodine derivatives | Chile | 51 | % |
Sales and distribution subsidiaries in the United States, Argentina, Belgium, Brazil, China, Colombia, Ecuador, Mexico, Peru, South Africa, Spain, and other locations. | Market SQM’s products throughout the world | Various |
|
For a list of all our consolidated subsidiaries, see Note 2.5 to our consolidated financial statements.
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4.D. Property, Plant and Equipment
Mineral Reserves and Resources
Information concerning our mining properties in this Annual Report on Form 20-F has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K. Among other things, subpart 1300 of Regulation S-K requires disclosure of mineral resources, in addition to mineral reserves, as of December 31, 2022, both in the aggregate and for each of our individually material mining properties. Our mineral reserves and resources are estimated by individuals deemed Qualified Persons (QP) according to the standards set forth in subpart 1300 of Regulation S-K.
SQM believes it is a production stage company based on the classification of its material properties. SQM reports mineral resource and reserve estimates for development and production stage projects, following the classification done by SQM of its material properties. See the individual property disclosures below for further details regarding the mineral rights, titles, property size, permits and other information for our significant mineral extraction properties.
Mineral resources and reserves are defined in subpart 1300 of Regulation S-K as follows:
● | Mineral resource. A concentration or occurrence of material of economic interest in or on the earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. |
● | Mineral reserve. An estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of a QP, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. |
Under subpart 1300 of Regulation S-K, mineral resources may not be classified as mineral reserves unless the determination has been made by a QP that such mineral resources can be the basis of an economically viable project. The conversion of reported mineral resources to mineral reserves should not be assumed.
Mineral resource classifications are differentiated under subpart 1300 of Regulation S-K, in part, as follows:
● | Measured resource. That part of a mineral resource with the highest level of geological confidence; quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a QP to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. |
● | Indicated resource. That part of a mineral resource with a level of geological confidence between that of measured and inferred resources; quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a QP to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. |
● | Inferred resource. That part of a mineral resource with the lowest level of geological confidence; quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. |
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Caliche
Geologists and mining engineers who are QPs prepare our estimates of caliche ore resources and reserves. The resource and reserve figures presented below are estimates and may be subject to modifications due to natural factors that affect the distribution of mineral grades, which would, in turn, modify the recovery of nitrate and iodine. Therefore, no assurance can be given that the indicated levels of recovery of nitrates and iodine will be realized.
We estimate ore resources and reserves based on evaluations, performed by engineers and geologists, of assay values derived from sampling of drillholes and other openings. Drillholes have been made at different space intervals in order to recognize mining resources. Normally, we start with 400x400 meters and then we reduce spacing to 200x200 meters, 100x100 meters and 50x50 meters. The geological occurrence of caliche ore is unique and different from other metallic and non-metallic minerals. Caliche ore is found in large horizontal layers at depths ranging from one to four meters and has an overburden between zero and two meters. This horizontal layering is a natural geological condition and allows us to estimate the continuity of the caliche bed based on surface geological reconnaissance and analysis of samples and trenches.
Salar de Atacama
Hydrogeologists and geologists who are QPs prepare our estimates of the resource and reserve base of potassium, sulfate, lithium and boron dissolved in brines at the Salar de Atacama. We have exploitation concessions through Corfo covering an area of 81,920 hectares, in which we have carried out geological exploitation, brine sampling and geostatistical analysis.
Mt. Holland
Geologists and mining engineers who are QPs prepared the mineral resource and reserve estimation for lithium hydroxide contained in pegmatites at Mt. Holland. The mineral reserve has been calculated from the mine plan created from the mineral resource estimation. Wireframes for the geological domains are defined by mineralization style and based on a cut-off grade of 0.5% lithium oxide.
Mining Rights
The discussion of our mining rights is organized below according to the geographic location of our mining operations. Our caliche ore mining interests are located throughout the valley of the Tarapacá and Antofagasta regions of northern Chile (in a part of the country known as “El Norte Grande”). From caliche ore, we produce products based on nitrates and iodine, and caliche also contains concentrations of potassium. Our mining interests in the brine deposits of the Salar de Atacama are found within the Atacama Desert, in the eastern region of El Norte Grande. From these brines we primarily produce products based on potassium, sulfate, and lithium. Our spodumene mining interests are located in Mt. Holland in Western Australia. From spodumene, we produce lithium hydroxide.
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The map below shows the location of our principal mining operations in Chile and the exploitation and exploration mining concessions that have been granted to us, as well as the mining properties that we lease from Corfo:
Figure 1. Location of SQM mining operations in Chile and the exploitation and exploration mining concessions.
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The map below shows the location of our principal mining operations in Australia and the exploitation and exploration mining concessions that have been granted to the Mt. Holland Joint Venture.
Figure 2. Location of Mt. Holland JV mining operations in Australia and the exploitation and exploration mining concessions.
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Mining Concessions in Chile
We hold our mining rights in Chile pursuant to mining concessions for exploration and exploitation of mining resources granted pursuant to applicable law in Chile. For a discussion of the mining concessions, see “Material Individual Properties — El Norte Grande — Mining Concessions for the Exploration and Exploitation of Caliche Ore” and “—Salar de Atacama Mining Concessions for Exploitation of Brines.”
As of December 31, 2022, approximately 56% of SQM’s mining interests in Chile were held pursuant to Mining Exploitation Concessions and 0.44% pursuant to Mining Exploration Concessions. Of the Mining Exploitation Concessions, approximately 98% already have been granted pursuant to applicable Chilean law, and approximately 2% are in the process of being granted. Of the Mining Exploration Concessions, approximately 100% already have been granted pursuant to applicable Chilean law.
In 2022, we made payments of US$7.3 million to the Chilean government for Mining Exploration and Exploitation Concessions, including the concessions we lease from Corfo. These payments do not include the payments we made directly to Corfo pursuant to the Corfo Agreements, according to the percentages of the sales price of products produced using brines from the Salar de Atacama.
The following table shows the Mining Exploitation and Exploration Concessions held by SQM, including the mining properties we lease from Corfo, as of December 31, 2022:
| Exploitation |
| Exploration |
|
|
|
| |||||
Concessions | Concessions | Total | ||||||||||
Total | Total | Total | ||||||||||
Region of Chile | Number |
| Hectares | Number |
| Hectares | Number | Hectares | ||||
Region I | 2,743 | 514,519 | 2 | 1,000 | 2,745 | 515,519 | ||||||
Region II | 8,921 | 2,345,120 | 17 | 10,900 | 8,938 | 2,356,020 | ||||||
Region III and others |
| 456 |
| 104,921 |
| 3 |
| 500 |
| 459 |
| 105,421 |
Total |
| 12,120 |
| 2,964,560 |
| 22 |
| 12,400 |
| 12,142 |
| 2,976,960 |
The majority of the Mining Exploitation Concessions held by SQM were requested primarily for non-metallic mining purposes. However, a small percentage of our Mining Exploration Concessions were requested for metallic mining purposes. The annual payment to the Chilean government for this group of concessions is higher.
Geological studies over mining properties that were requested primarily for non-metallic mining purposes may show that the concession area is of interest for metallic mining purposes, in which case we must inform the Chilean National Geology and Mining Survey (Sernageomin), indicating that the type of substance contained by such Mining Concessions has changed, for purposes of the annual payment for these rights.
Mt. Holland Mining Rights
The Mt. Holland Lithium project development envelope for the Mine and Concentrator is spread across three core mining tenements (M77/1065, M77/1066 & M77/1080), as well as exploration licenses, general purpose licenses and miscellaneous licenses (Project Tenements), covering an approximate area of 4,606 hectares. A summary map showing the main tenements is provided in Figure 2.
The majority of the project properties are currently registered in equal parts to MH Gold, an affiliate of Wesfarmers Limited, and SQM Australia, an affiliate of SQM. Other exploration rights in the Mt. Holland project are registered to MH Gold Pty Ltd or Montague Resources Australia Pty Ltd, both ultimately controlled by Wesfarmers Chemicals, Energy and Fertilizers (WesCEF). The project is a joint venture, in which SQM owns 50% and Wesfarmers Limited owns the remaining 50% (the “Mt. Holland JV”), and is managed by Covalent Lithium Pty Ltd (“Covalent”), an entity owned 50% by SQM and 50% by Wesfarmers. Covalent is not the registered holder or applicant of the project properties under the Mining Act of 1978 (WA) (Mining Act). Covalent and the joint venturers have entered into an access agreement with Montague and MH Gold that authorizes the Mt. Holland JV to access those properties as required for the purpose of the project.
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Costs
Caliche ore is the key raw material used in the production of iodine, specialty plant nutrients and industrial chemicals. The following gross margins for the specified business lines were calculated on the same basis as cut-off grades used to estimate our reserves. We expect costs to remain relatively stable in the near future.
| 2022 |
| 2021 |
| 2020 | |||||||
Gross | Gross | Gross | ||||||||||
Margin | Price | Margin | Price | Margin | Price | |||||||
Iodine and Derivatives | 63 | % | US$59/kg | 45 | % | US$36/kg | 50 | % | US$35/kg | |||
Specialty Plant Nutrition |
| 38 | % | US$1,383/ton |
| 29 | % | US$787/ton |
| 23 | % | US$677/ton |
Industrial Chemicals |
| 32 | % | US$1,124/ton |
| 17 | % | US$757/ton |
| 26 | % | US$713/ton |
Brines from the Salar de Atacama are the key raw material used in the production of potassium chloride and potassium sulfate, and lithium and its derivatives. The following gross margins for the specified business lines were calculated on the same basis as cut-off grades used to estimate our reserves. We expect costs to remain relatively stable in the near future.
| 2022 |
| 2021 |
| 2020 | |||||||
Gross | Gross | Gross | ||||||||||
Margin | Price | Margin | Price | Margin | Price | |||||||
Potassium Chloride and Potassium Sulfate | 56 | % | US$910/ton | 39 | % | US$466/ton | 11 | % | US$288/ton | |||
Lithium and Derivatives |
| 55 | % | US$52,000/ton |
| 47 | % | US$9300/ton |
| 23 | % | US$5,931/ton |
Summary of Mineral Reserves and Resources
The following tables summarize our estimated mineral reserves and resources as of December 31, 2022. The quantity of the mineral resources is estimated on an in situ basis as attributable to us. Mineral resources are reported exclusive of mineral reserves. The quantity of the mineral reserves is estimated on a saleable product basis as attributable to us. The relevant technical information supporting mineral reserves and resources for each material property is included in the “Material Individual Properties” section below, as well as in the technical report summaries (“TRS”) filed as Exhibits 96.1, 96.2, 96.3 and 96.4 to this Annual Report on Form 20-F.
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Summary Mineral Reserves at End of the Fiscal Year Ended December 31, 2022(1)
Proven Mineral Reserves | Probable Mineral Reserves | Total Mineral Reserves | ||||||||||
| Amount |
| Grade |
| Amount |
| Grade |
| Amount |
| Grade | |
(Vol Mm3) | (% Li by weight) | (Vol Mm3) | (% Li by weight) | (Vol Mm3) | (% Li by weight) | |||||||
Lithium—Brines:(2), (3), (4), (5) |
| 143 |
| 0.20 |
| 107 |
| 0.20 |
| 250 |
| 0.20 |
Salar de Atacama, Chile |
|
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|
|
|
|
|
|
|
|
|
|
| Amount |
| Grade |
| Amount |
| Grade |
| Amount |
| Grade | |
| (MT) |
| (Li2O%) |
| (MT) |
| (Li2O%) |
| (MT) |
| (Li2O%) | |
Lithium—Pegmatite: (6) |
|
|
|
|
|
|
|
|
|
|
|
|
Mt. Holland, Australia |
| 10.8 |
| 1.48 |
| 31.2 |
| 1.6 |
| 42 |
| 1.57 |
|
| Grade |
|
| Grade |
|
| Grade | ||||
| Amount |
| (% K by |
| Amount |
| (% K by |
| Amount |
| (% K by | |
(Vol Mm3) |
| weight) | (Vol Mm3) |
| weight]) | (Vol Mm3) |
| weight) | ||||
Potassium: (2), (3), (4), (5) |
| 143.0 | 2.33 |
| 107.0 |
| 2.16 |
| 250 |
| 226.0 | |
Salar de Atacama, Chile |
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| Grade |
|
| Grade |
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| Grade | ||||
| Amount |
| (% NO3 by |
| Amount |
| (% NO3 by |
| Amount |
| (% NO3 by | |
(MT) |
| weight) | (MT) |
| weight) | (MT) |
| weight) | ||||
Nitrate: (7), (8), (9) |
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El Norte Grande Caliche, Chile |
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|
|
|
|
Pedro de Valdivia |
| 99 |
| 9.1 |
| 112 |
| 5.8 |
| 211 |
| 7.3 |
Maria Elena |
| 94 |
| 8.1 |
| 10 |
| 6.9 |
| 104 |
| 8.0 |
Pampa Blanca |
| 35 |
| 6.3 |
| 498 |
| 4.7 |
| 533 |
| 4.8 |
Nueva Victoria |
| 220 |
| 5.9 |
| 553 |
| 5.1 |
| 773 |
| 5.3 |
Pampa Orcoma |
| — |
| — |
| 309 |
| 6.9 |
| 309 |
| 6.9 |
Total |
| 448 |
| 7.1 |
| 1,482 |
| 5.4 |
| 1,930 |
| 5.8 |
|
| Grade |
|
| Grade |
|
| Grade | ||||
| Amount |
| (I2 parts per |
| Amount |
| (I2 parts per |
| Amount |
| (I2 parts per | |
(MT) |
| million) | (MT) |
| million) | (MT) |
| million) | ||||
Iodine: (7), (8), (9) |
|
|
|
|
|
|
|
|
|
|
|
|
El Norte Grande Caliche, Chile |
|
|
|
|
|
|
|
|
|
|
|
|
Pedro del Valdivia |
| 99 |
| 522 |
| 112 |
| 366 |
| 211 |
| 439 |
Maria Elena |
| 95 |
| 491 |
| 10 |
| 374 |
| 105 |
| 480 |
Pampa Blanca |
| 35 |
| 552 |
| 498 |
| 480 |
| 533 |
| 485 |
Nueva Victoria |
| 220 |
| 441 |
| 553 |
| 415 |
| 773 |
| 422 |
Pampa Orcoma |
| — |
| — |
| 309 |
| 413 |
| 309 |
| 413 |
Total |
| 449 |
| 478 |
| 1,482 |
| 432 |
| 1,930 |
| 443 |
(1) | Comparisons of values may not add due to rounding of numbers and the differences caused by averaging |
(2) | Salar de Atacama, Chile. The process efficiency is based on the type of extracted brine at each well over the course of the simulation, the average process efficiency over the entire life of mine (LoM) is approximately 52% for lithium and approximately 74% for potassium. |
(3) | Salar de Atacama, Chile. The average lithium and potassium concentration is weighted by the simulated extraction rates in each well. |
(4) | Salar de Atacama, Chile. The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and the forecast to 2040, a projected lithium carbonate price of US$15,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin. |
(5) | Salar de Atacama, Chile. This reserve estimate differs from the in-situ base reserve previously reported (SQM, 2020) and considers the modifying factors of converting mineral resources to mineral reserves, including the production wellfield design and efficiency, as well as environmental and process recovery factors. The reserve estimate also considers the expiry of the Lease Agreement in 2030 (end of LoM). The Qualified Persons for the Mineral Reserves are Rodrigo Riquelme and Gino Slanzi. |
35
(6) | Mt. Holland, Australia. Mineral reserve tonnage and grade have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. Metallurgical processes are designed for nominal 2Mpta ore feed. Process recovery to concentrate is estimated at 75% for lithium oxide for predominantly spodumene mineralization and 0% for other mineralization types. Refinery process recovery is estimated at 85%. Tantalum recovery is estimated at 0%. A total operating cost of US$4,979 per metric ton for Lithium hydroxide production was considered in the reserve evaluation. The price, cost, and mass yield parameters, along with the internal constraints of the current operations, result in a mineral reserves cut-off grade of 0.5% lithium oxide based on a selling lithium hydroxide price of US$11,000 per ton FOB. The Qualified Person for the Mineral Reserves is David Billington with an effective date: December 15, 2021. No material changes have been reported since that date. |
(7) | El Norte Grande Caliche, Chile. The cutoff grades of the proven and probable Reserves vary according to the required targets at the different mines. The values assigned correspond to the averages of the different sectors. The cut-off grade is for nitrate content, while also considering the iodine content. |
(8) | El Norte Grande Caliche, Chile. The average overall metallurgical recovery of the nitrate and iodine processes contained in the recovered material varies between 50% and 70%. |
(9) | The mineral resource and reserve estimate considers a cut-off grade of 300 ppm for iodine (I2) based on the production costs of iodine and derivate products. Based on historical iodine prices from 2010 and the forecast to 2040, a projected Iodine price of US$47,500 per metric ton is determined, taking in account the corresponding operational, financial and planned investment costs, depreciation, profit margin and taxes. A similar analysis was undertaken for nitrates where the cut-off grade of 3.0% sodium nitrate has been set by SQM based on respective costs for potassium-sodium nitrates (fertilizers) production. A projected price of US$820 per metric ton for potassium-sodium nitrates is considered by SQM in the economic analysis executed from 2010 and the forecast to 2040. In addition, a projected solar salts price of US$680 per metric ton has been considered by SQM. Modifying factors of historical operational use in various of SQM’s mining facilities, are applied to iodine and nitrate grades reported as probable resource estimates. The factors applied to iodine and nitrate grades are 0.9 and 0.85 respectively. The Qualified Person for Nueva Victoria and Pampa Orcoma mineral reserves are Marta Aguilera, Marco Lema and Gino Slanzi. |
36
Summary Mineral Resources Exclusive of Reserves at End of the Fiscal Year Ended December 31, 2022 (1), (2), (3)
| Measured Mineral |
| Indicated Mineral |
| Measured & Indicated |
| Inferred Mineral | |||||||||
Resources | Resources | Mineral Resources | Resources | |||||||||||||
Grade | Grade | Grade | ||||||||||||||
Amount | (% Li by | Amount | (% Li by | Amount | Concentration | Amount | (% Li by | |||||||||
(Vol Mm3) |
| weight) | (Vol Mm3) |
| weight) | (Vol Mm3) |
| (% Li by weight) | (Vol Mm3) |
| weight) | |||||
Lithium—Brines:(3), (4) |
| 2.254 |
| 0.20 |
| 1.435 | 0.160 |
| 3.689 |
| 0.180 |
| 1.614 |
| 0.133 | |
Salar de Atacama, Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amount |
| Grade |
| Amount |
| Grade |
| Amount |
| Grade |
| Amount |
| Grade | |
| (MT) |
| (Li2O%) |
| (MT) |
| (Li2O%) |
| (MT) |
| (Li2O%) |
| (MT) |
| (Li2O%) | |
Lithium—Pegamite:(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mt. Holland, Australia |
| 13.5 |
| 1.58 |
| 30.5 |
| 1.45 |
| 44.0 |
| 1.49 |
| 3.5 |
| 1.38 |
|
| Grade |
|
| Grade |
|
|
|
| Grade | ||||||
| Amount |
| (% K by |
| Amount |
| (% K by |
| Amount |
| Grade |
| Amount |
| (% K by | |
(Vol Mm3) |
| weight) | (Vol Mm3) |
| weight) | (Vol Mm3) | (% K by weight) | (Vol Mm3) |
| weight) | ||||||
Potassium:(3),(4) |
| 2.254 |
| 1.80 |
| 1.435 |
| 1.70 |
| 3.689 |
| 1.77 | 1.614 |
| 1.77 | |
Salar de Atacama, Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Grade |
|
| Grade |
|
| Grade |
|
| Grade | |||||
| Amount |
| (% NO3 by |
| Amount |
| (% NO3 by |
| Amount |
| (% NO3 by |
| Amount |
| (% NO3 by | |
(MT) |
| weight) | (MT) |
| weight) | (MT) |
| weight) | (MT) |
| weight) | |||||
Nitrate: (6), (7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Norte Grande Caliche, Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pedro de Valdivia |
| — |
| — |
| 138 |
| 7.6 |
| 138 |
| 7.6 |
| 52 |
| 6.1 |
Maria Elena |
| 21 |
| 11.1 |
| 119 |
| 10.0 |
| 140 |
| 10.2 |
| 117 |
| 7.2 |
Pampa Blanca |
| 17 |
| 5.3 |
| 48 |
| 8.9 |
| 65 |
| 8.0 |
| 223 |
| 5.4 |
Nueva Victoria |
| — |
| — |
| 20 |
| 4.7 |
| 20 |
| 4.7 |
| 31 |
| 6.4 |
Pampa Orcoma |
| — |
| — |
| 18 |
| 7.4 |
| 18 |
| 7.4 |
| — |
| — |
Total |
| 38 |
| 8.5 |
| 343 |
| 8.4 |
| 381 |
| 8.5 |
| 423 |
| 6.1 |
|
| Grade |
|
| Grade |
|
| Grade |
|
| Grade | |||||
| Amount |
| (I2 parts per |
| Amount |
| (I2 parts per |
| Amount |
| (I2 parts per |
| Amount |
| (I2 parts per | |
(MT) |
| million) | (MT) |
| million) | (MT) |
| million) | (MT) |
| million) | |||||
Iodine:(6), (7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Norte Grande Caliche, Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pedro de Valdivia |
| — |
| — |
| 138 |
| 564 |
| 138 |
| 564 |
| 52 |
| 409 |
Maria Elena |
| 21 |
| 489 |
| 119 |
| 465 |
| 140 |
| 469 |
| 117 |
| 362 |
Pampa Blanca |
| 17 |
| 563 |
| 48 |
| 383 |
| 65 |
| 430 |
| 223 |
| 511 |
Nueva Victoria |
| — |
| — |
| 20 |
| 415 |
| 20 |
| 415 |
| 31 |
| 343 |
Pampa Orcoma |
| — |
| — |
| 18 |
| 457 |
| 18 |
| 457 |
| — |
| — |
Total |
| 38 |
| 522 |
| 343 |
| 490 |
| 381 |
| 493 |
| 423 |
| 445 |
(1) | Comparison of values may not add due to the rounding of numbers and differences caused by averaging. |
(2) | Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves upon the application of modifying factors. |
(3) | Salar de Atacama, Chile. Mineral resources are reported as in-situ and exclusive of mineral reserves, where the estimated mineral reserve without processing losses during the reported LoM and real declared extraction from 2022 were subtracted from the mineral resource inclusive of mineral reserves. A direct correlation between proven reserves and measured resources, as well as probable reserves and indicated resources was assumed.The Qualified Person for the Mineral Resources is Andrés Fock. |
(4) | Salar de Atacama, Chile. The mineral resource and reserve estimate consider a 0.05% w/w cut-off grade for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from |
37
2010 and the forecast to 2040, a projected lithium carbonate price of US$15,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin. |
(5) | Mt. Holland, Australia. Mineral resource tonnage and measured content have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. Mineral resources are reported as exclusive of mineral reserves. Resource disclosed corresponds to the resources attributable to SQM. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Resources have been reported as in situ (hard rock within optimized pit shell). Pit optimization and economics for derivation of cut off grade include mine gate pricing of US$800 FOB per ton of 6% Li2O concentrate, AUS$19 per bcm mining cost (LoM average cost-variable by depth), AU$65 processing cost per ton. Mining dilution set at 5% and recovery at 95%. Royalty fees 5%. The optimization considered for the concentrator is 75%. Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of AU$0.75:US$1.00. These economics define a cut-off grade of 0.50% Li2O. Kerry Griffin is the QP responsible for the mineral resource estimate with an effective date: October 6, 2021. No material changes have been reported since that date. |
(6) | El Norte Grande, Caliche, Chile. To calculate measured resources, SQM uses the RGM100T and RGM50 data results combined in a 3D block model built using Kriging and applying some criteria: caliche thickness ≥ 2.0 m; overload thickness ≤1.0 m; waste / Mineral Ratio ≤ 1.0; and cut-off grades of NaNO3 (3%) and Iodine (300 ppm). To calculate indicated resources, SQM uses the RGM100 and RGM200 data results combined using the inverse distance weighting (IDW). To evaluate Probable Reserves a reduction on grades mut be consider as consequence of the deposit geological variability which determines a contrasting decrease in grades by going from 200x200m research grids to lower 100T (~100x50m) or 50x50m grids. The mineral resource estimates were prepared by Marta Aguilera (who is the independent Qualified Person for these mineral resource estimates), reported using the S-K 1300 Definition Standards adopted December 2018. The Qualified Persons for the Pedro de Valdivia, María Elena and Pampa Blanca Mineral Resources are Marco Lema and Marta Aguilera. |
(7) | El Norte Grande, Caliche, Chile. The estimate was completed using a SG of 2.1 ton/m³. Cut-off grade for iodine is 300 ppm. The cutoff grades of the mineral resources vary according to the required targets at the different mines. The values assigned correspond to the averages of the different sectors. In our mining sites, the cut-off grade is for nitrate content considers iodine. The mineral reserve estimate considers a cut-off grade of 300ppm for iodine (I2) based on the production costs of Iodine and derivate products. Based on historical iodine prices from 2010 and the forecast to 2040, a projected iodine price of US$47,500 is determined, taking in account the corresponding operational, financial and planned investment costs, depreciation, profit margin and taxes. A similar analysis was undertaken for nitrates where the cut-off grade of 3.0% NaNO3 has been set by SQM based on respective costs for potassium-sodium nitrates (fertilizers) production. A projected price of US$820 per ton for potassium-sodium nitrates is considered by SQM in the economic analysis executed from 2010 and the forecast to 2040. In addition, a projected solar salts price of US$680 per ton has been considered by SQM. |
Material Individual Properties
To determine our individually material mining operations in accordance with subpart 1300 of Regulation S-K, management considered both quantitative and qualitative factors, assessed in the context of our overall business and financial condition. Such assessment included our aggregate mining operations on all of our mining properties, regardless of the stage of production or the type of mineral produced. Quantitative factors included, among others, mining operations’ relative contributions to our aggregate historical and estimated revenues, cash flows, and EBITDA. Qualitative factors may include, as applicable, capital expansion plans, long-term pricing outlook, the regulatory environment and various strategic priorities. We concluded that, as of December 31, 2022, our individually material mines are the caliche ore mines at Nueva Victoria and Pampa Orcoma in El Norte Grande region of Chile, the brines in the Salar de Atacama in Chile and the Mt. Holland lithium project in Western Australia. We will update our assessment of individually material mines on an annual basis.
The information that follows relating to such individually material properties is derived, for the most part, from, and in some instances is an extract from, from the TRS relating to such properties prepared in compliance with Item 601(b)(96) and subpart 1300 of Regulation S-K. Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, incorporated herein by reference and made a part of this Annual Report on Form 20-F. The relevant TRS for the Salar de Atacama property, the Nueva Victoria property, the Pampa Orcoma property, and the Mt. Holland lithium project properties are included as Exhibits 96.1, 96.2, 96.3 and 96.4, respectively, to this Annual Report on Form 20-F.
38
El Norte Grande Caliche, Chile
Our mining operations are concentrated in the First Region of Chile, where we mainly work in the mining areas of Tente en el Aire,Nueva Victoria Norte/West and Torcaza.
The El Norte Grande Caliche, found in Regions I and II of northern Chile, corresponds to flat areas or “pampas”, that have been thoroughly explored. Results indicate that these prospects hold mineralization of nitrate and iodine. The area is accessible from Santiago through Route 5. The mineralization is stratiform in style, with a wide areal distribution, forming "spots" of several kilometers in extension, where mineralization thicknesses are variable. As a result of geological activity over time (volcanism, weathering, faulting) the deposits can be found as continuous mantles. Environmental permits for mining operations, and the corresponding Environmental Qualification Resolution, grant access to the required water and electricity supply, as well as the infrastructure required for the mining operation.
Facilities
Nueva Victoria
The Nueva Victoria mine and facilities are located 140 kilometers southeast of Iquique and are accessible by highway. Since 2007, the Nueva Victoria mine includes the mining properties Soronal, Mapocho and Iris. At this site, we use caliche ore to produce salts rich in nitrates and iodine, through heap leaching and the use of solar evaporation ponds. The main production facilities at this site include the operation centers for the heap leaching process, the iodide and iodine plants at Nueva Victoria and Iris and the evaporation ponds at the Sur Viejo sector of the site. The areas currently being mined are located approximately 25 kilometers northeast of Nueva Victoria. Solar energy and electricity are the primary sources of power for this operation. The nitrate-rich salts are sent to Coya Sur, which is a process plant located approximately 15 kilometers south of María Elena, and production activities undertaken there are associated with the production of potassium nitrate and finished products. The main production plants at this site include four potassium nitrate plants with a total capacity of 1,300,000 metric tons per year. There are also four production lines for crystallized nitrates, with a total capacity of 1,200,000 metric tons per year, and a prilling plant with a capacity of 360,000 metric tons per year. The potassium nitrate produced at Coya Sur is an intermediate product that is used as a raw material for the production of finished products (crystallized nitrates and prilled nitrates). Therefore, the production capacities listed above are not independent of one another and cannot be added together to obtain an overall total capacity. Natural gas is the main source of energy for our Coya Sur operation.
Pampa Orcoma
The Pampa Orcoma Project is located in the Tarapacá Region of northern Chile. It is situated 99 kilometers to the northeast of the city of Iquique, in the community of Huara. The property covers an area of 10,296 hectares and is composed of 45 mining concessions. The Pampa Orcoma Project aims to produce iodide, iodine and nitrate-rich salts from the processing of caliche that will be extracted from deposits rich in this mineral. The Pampa Orcoma Mining Plan considers an initial extraction of caliche at a rate of 8.4 Mt/year between 2024-2027, followed by an extraction rate of 20 Mt/year from 2028 onwards. For the period 2024-2040 a total extraction of 287.4 Mt of caliche is projected with an average grade of 408 ppm iodine and 6.7% nitrates. The production process to obtain iodine as the main product, along with salts rich in sodium nitrate and potassium nitrate as by-products, involves leaching with seawater or with recirculated solutions to obtain a solution rich in iodate, which will then be treated in chemical plants to transform it into elemental iodine in prill format. The Pampa Orcoma Project contemplates the construction of the following facilities: iodide and iodine production plants, with a capacity of 2,500 t/year (of equivalent iodine), evaporation ponds to produce salts rich in nitrate at a rate of 320,325 t/year and a seawater adduction pipe to meet the water needs. Solar energy and electricity are the primary sources of power for this future operation.
39
The following table provides a summary of our El Norte Grande production facilities as of December 31, 2022:
|
|
| Nominal Production |
| Weighted |
| ||||
Capacity | Average | Gross Book | ||||||||
Approximate Size | (thousands of metric | Age | Value | |||||||
Facility | Type of Facility | (hectares) (1) | tons/year) | (years) (2) | (millions of US$) (2) | |||||
Coya Sur (3) (4) | Nitrates production | 1,518 | Potassium nitrate: 1,300 Crystallized nitrates: 1,200 Prilled nitrates: 360 | 10.25 | 756.4 | |||||
Nueva Victoria (5) (7) |
| Concentrated nitrate salts and iodine production |
| 47,492 |
| Iodine: 13.0 |
| 6.92 |
| 625.8 |
Pampa Orcoma |
| Concentrated nitrate salts and iodine production |
| 7,387 |
| 2.5 |
| — |
| — |
(1) | Approximate size considers both the production facilities and the mine for Nueva Victoria Mining areas are those authorized for exploitation by the environmental authority and/or Sernageomin. |
(2) | Weighted average age and gross book value correspond to production facilities, excluding the mine, for Nueva Victoria. |
(3) | Includes production facilities and solar evaporation ponds. |
(4) | The potassium nitrate produced at Coya Sur is an intermediate product that is used as a raw material for the production of finished products (crystallized nitrates and prilled nitrates). Therefore, the production capacities listed above are not independent of one another and cannot be added together to obtain an overall total capacity. |
(5) | Includes production facilities, solar evaporation ponds and leaching heaps. |
(6) | The nominal production capacity for iodine considers the capacity of our plants. The effective capacity is 14,800 metric tons per year. |
We directly or indirectly through subsidiaries own, lease or hold concessions over the facilities at which we carry out our operations. Such facilities are free of any material liens, pledges or encumbrances, and we believe they are suitable and adequate for the business we conduct in them.
Extraction Yields
The following table shows certain operating data relating to each of our El Norte Grande mines for 2022, 2021 and 2020:
(in thousands, unless otherwise stated) |
| 2022 |
| 2021 |
| 2020 |
Coya Sur (1) |
|
|
|
|
|
|
Metric tons of crystallized nitrate produced |
| 725 |
| 820 |
| 935 |
Nueva Victoria |
|
|
|
|
| |
Metric tons of ore mined |
| 44,324 |
| 41,428 |
| 43,420 |
Iodine (ppm) |
| 430 |
| 441 |
| 452 |
Metric tons of iodine produced |
| 10.8 |
| 8.7 |
| 10.6 |
(1) | Includes production at Coya Sur from treatment of nitrates solutions from María Elena and Pedro de Valdivia, nitrate salts from pile treatment at Nueva Victoria, and net production from NPT, or technical grade potassium nitrates. |
Reserves and Resources
According to our experience in caliche ore, the grid pattern drillholes with spacings between 50 and100 meters produce data on the caliche resources that is sufficiently defined to consider them measured resources and then, adjusting for technical, economic and legal aspects, as proven reserves. These reserves are obtained using the Kriging Method and the application of operating parameters to obtain economically profitable reserves.
40
Similarly, the information obtained from detailed geologic work and samples taken from grid pattern drillholes with spacings between 100 and 200 meters can be used to determine indicated resources. By adjusting such indicated resources to account for technical, economic and legal factors, it is possible to calculate probable reserves. Probable reserves are calculated by using a Inverse Distance Weighting (IDW), and have an uncertainty or margin of error greater than that of proven reserves. However, the degree of certainty of probable reserves is high enough to assume continuity between points of observation.
The conversion of resources into reserves requires consideration of modifying factors, the most relevant of which is the existence of a valid environmental license (RCA or Sectorial Authorization). The criteria for converting resources into reserves, based on the environmental license modifying factor criterion, adopted for caliche mines are as follows:
1. | Unit tonnage conversion criteria in both measured resources and indicated resources. |
2. | Grade conversion criteria: unit factor in measured resources and lower than unit and variable according to the mine, in the Iodine and Nitrate grades, for the indicated resources, due to the variability of the deposit. |
3. | Application of the factor associated with related environmental permit, not qualifying as reserves the resources defined in sectors without an environmental permit and qualifying as proven/probable reserves the measured/indicated resources associated with sectors with an effective environmental permit or Sectorial Authorization in force. |
Nueva Victoria—Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20221,2,3,4,5,6,7,8,9
|
| Nitrate |
|
|
| |||||
Amount | Grade | Iodine Grade | ||||||||
(Metric | (% by | (Parts per | Cut-off | Metallurgical | ||||||
tons) | weight) | million(ppm)) | grades1 | recovery 2 | ||||||
Proven mineral reserves | 220 | 5.9 | 441 | Nitrates 3.0%. Iodine 300 ppm | 50%-70% | |||||
Probable mineral reserves |
| 553 |
| 5.1 |
| 415 |
|
|
|
|
Total mineral reserves |
| 773 |
| 5.3 |
| 422 |
|
|
|
|
(1) | Mineral Reserves are based on Measured and Indicated Mineral Resources at an operating cutoff of 3% for nitrates and 300 ppm iodine. Operating constraints of caliche thickness ≥ 2.0 m; overburden thickness ≤1.0 m; and waste / caliche ratio ≤01.0 are applied. |
(2) | Proven Mineral Reserves are based on Measured Mineral Resources at the criteria described in (1) above. The average overall metallurgical recovery of the nitrate and iodine processes contained in the recovered material varies between 50% and 70%. Based on SQM’s operational experience and the laboratory and full-scale tests carried out, a progressive increase, over time, in heap leaching yield is expected, as irrigation application rates increase. |
(3) | Probable Mineral Reserves are based on Indicated Mineral Resources at the criteria described in (1) above with a grade call factor of 0.9 for iodine and 0.85 for nitrates confirmed by operating experience. |
(4) | Mineral Reserves are stated as in-situ ore (caliche) as the point of reference. |
(5) | The units “Mt”, “kt”, “ppm” and % refer to million tonnes, kilotonnes, parts per million, and weight percent, respectively. |
(6) | Mineral Reserves are based on an iodine price of US$47.5 per kilogram and a nitrate price of US$295 per ton. Mineral Reserves are also based on economic viability as demonstrated in an after-tax discounted cashflow. |
(7) | Marta Aguilera is the QP responsible for the Mineral Reserves. |
(8) | The QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political or other relevant factors that could materially affect the Mineral Reserve estimate that are not discussed in this TRS. |
(9) | Comparisons of values may not total due to rounding of numbers and the differences caused by use of averaging methods. |
41
Nueva Victoria—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20221,2,3,4,5,6
| Resources |
|
|
| ||||
|
| Nitrate |
|
| ||||
Amount | Grade | Iodine Grade | ||||||
(Metric | (% by | (Parts per | Cut-off | |||||
tons) | weight) | million(ppm)) | grade5 | |||||
Measured mineral resources | — |
| — | — | Nitrates 3.0%, Iodine 300 ppm | |||
Indicated mineral resources | 20 |
| 5 | 415 |
| |||
Measured + Indicated mineral resources | 20 |
| 5 | 415 |
| |||
Inferred mineral resources | 31 |
| 6.5 | 343 |
|
(1) | Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves upon the application of modifying factors. |
(2) | Mineral Resources are reported as in-situ and exclusive of Mineral Reserves, where the estimated Mineral Reserve without processing losses during the reported LoM was subtracted from the Mineral Resource inclusive of Mineral Reserves. All Measured and Indicated Mineral Resources have been converted into Mineral Reserves; as a result, only Inferred Mineral Resources are reported in this TRS. |
(3) | Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods |
(4) | The units “Mt”, “ppm” and % refer to million tonnes, parts per million, and weight percent respectively. |
(5) | The Mineral Resource estimate considers a cut-off grade of 3% for nitrates and 300 ppm for iodine, based on accumulated cut-off iodine grades and operational average grades, as well as caliche thickness ≥ 2.0 m and overburden thickness ≤ 1.0 m. The iodine cut-off grade considers the cost and medium- and long-term price forecasts of generating iodine as discussed in Sections 11, 16 and 19 of the TRS. |
(6) | Marta Aguilera is the QP responsible for the Mineral Resources. |
Pampa Orcoma—Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20221,2,3,4,5,6,7,8
|
| Nitrate |
|
|
| |||||
Amount | Grade | Iodine Grade | ||||||||
(Metric | (% by | (Parts per | Cut-off | Metallurgical | ||||||
tons) | weight) | million(ppm)) | grades1 | recovery 2 | ||||||
Proven mineral reserves | — | — | — | Nitrates 3.0%, Iodine 300 ppm | 50%-70% | |||||
Probable mineral reserves |
| 309 |
| 6.9 |
| 413 |
|
|
|
|
Total mineral reserves |
| 309 |
| 6.9 |
| 413 |
|
|
|
|
(1) | Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods. |
(2) | The units “Mt” and “ppm” refer to million tonnes and parts per million, respectively. The average overall metallurgical recovery of the nitrate and iodine processes contained in the recovered material varies between 50% and 70%. Based on SQM’s operational experience and the laboratory and full-scale tests carried out, a progressive increase, over time, in heap leaching yield is expected, as irrigation application rates increase. |
(3) | The Mineral Reserve estimate considers a cut-off grade of 300 ppm for iodine and 3.0% for nitrates, based on accumulated cut-off iodine grades and operational average grades, as well as the cost and medium- and long-term prices forecast of generating iodine. |
(4) | Modifying factors of historical operational use in various of SQM’s mining facilities, are applied to iodine and nitrate grades, the factors applied to iodine and nitrate grades are 0.9 and 0.85, respectively. |
(5) | Mineral Resources in the area without an environmental permit are estimated at 18 Mt. |
(6) | Mineral Reserves are reported as in-situ ore. |
(7) | Marta Aguilera is the QP responsible for the Mineral Reserves. |
(8) | The QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political or other relevant factors that could materially affect the Mineral Reserve estimate that are not discussed in this TRS. |
42
Pampa Orcoma—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20221,2,3,4,5,6
| Resources |
|
|
|
| |||
|
| Nitrate |
|
| ||||
Amount | Grade | Iodine Grade | ||||||
(Metric | (% by | (Parts per | Cut-off | |||||
tons) | weight) | million(ppm)) | grades1,2 | |||||
Measured mineral resources | — |
| — | — | Nitrates 3.0%, Iodine 300 ppm | |||
Indicated mineral resources | 18 |
| 7.4 | 457 |
| |||
Measured + Indicated mineral resources | 18 |
| 7.4 | 457 |
| |||
Inferred mineral resources | — |
| — | — |
|
(1) | Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves upon the application of modifying factors. |
(2) | Mineral Resources are reported as in-situ and exclusive of Mineral Reserves, where the estimated Mineral Reserve without processing losses during the reported LOM was subtracted from the Mineral Resource inclusive of Mineral Reserves. |
(3) | Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods. |
(4) | The units “Mt” and “ppm” refers to million tonnes and parts per million respectively. |
(5) | The Mineral Resource estimate considers a cut-off grade of 300 ppm for iodine and 3.0% for nitrates, based on accumulated cut-off iodine grades and operational average grades, as well as the cost and medium and long term prices forecast for prilled iodine production. |
(6) | Marta Aguilera is the QP responsible for the Mineral Resources. |
The Nueva Victoria proven mineral reserves of 220 metric tons on December 31, 2022, decreased by 18% from 268 metric tons at December 31, 2021. The Nueva Victoria probable mineral reserves of 553 metric tons at December 31, 2022, decreased by 15% from 649 metric tons at December 31, 2021. The decline in mineral reserves was driven by mine exploitation, recategorization of probable reserves and change in methodology for assessing probable reserves by Inverse Distance Weighting (IDW). The indicated mineral resources increased by 20 metric tons because of increased mineral resources due to updated environmental exclusion areas in the Environmental Impact Study (Estudio de Impacto Ambiental) or “EIA” of Tente en El Aire. The Nueva Victoria inferred mineral resources of 31 metric tons at December 31, 2022, decreased from 33 metric tons at December 31, 2021, because of reduced mineral resources due to updated environmental exclusion areas in the EIA of Tente en El Aire.
The Pampa Orcoma probable mineral reserves and indicated mineral resources of 309 metric tons and 18 metric tons at December 31, 2022, respectively, remained unchanged from the amounts at December 31, 2021, because there were no material changes that would modify the estimated mineral reserves.
The proven and probable reserves shown above are the result of the evaluation of approximately 19.0% of the total caliche-related mining property of our Company. However, we have explored more intensely the areas in which we believe there is a higher potential of finding high-grade caliche ore minerals. The remaining 81.4% of this area has not been explored or has had limited reconnaissance, which is not sufficient to determine the potential and hypothetical resources. In 2022, we did not carry out basic reconnaissance of new mining properties. With respect to detailed explorations, in 2022, a campaign was carried out to recategorize indicated resources equivalent to 5,250 hectares in the TEA Sur, Franja Oeste, Hermosa, and Sector IV sectors of Pampa Blanca. An advanced exploration program is already designed for 2023, aimed at covering an area of 11,170 hectares in Tente en el Aire, Pampa Orcoma, Franja Oeste and Sector V of Pampa Blanca. The reserves shown in these tables are calculated based on properties that are not involved in any legal disputes between SQM and other parties.
We maintain an ongoing program of exploration and resource evaluation on the land surrounding our production mines, and other sites for which we have the appropriate concessions.
43
The information presented in the table with respect to the Nueva Victoria, Coya Sur and Pampa Orcoma mines has been validated by Qualified Persons:
Ms. Marta Aguilera is a Geologist with more than 38 years of experience in the mining industry, including technical and general management, short and long term operational planning, cost estimation and analysis, resource estimation, geostatistics, surveys of feasibility and reserve audits. Project experience includes involvement with industrial minerals in design, analysis, planning and operational control.Ms. Aguilera is a Qualified Person as defined in subpart 1300 of Regulation S-K and is registered under No. 441 in the Public Registry of Qualified Persons in Mining Resources and Reserves, in accordance with Law No. 20,235 that regulates the role of Qualified Persons and creates the Qualifying Commission of Competences in Mining Resources and Reserves ("Law for Qualified Persons") and its current regulation in Chile.
Mr. Lema is a Civil Mining Engineer with more than 30 years of experience in the field. Currently, he works for SQM as Superintendent of Mining Resources and Planning. He has worked as a Mining Engineer in Metallic and Non-Metallic deposits, with vast experience in the latter. Mr. Lema is a Qualified Person, as defined in subpart 1300 of Regulation S-K and is registered under No. 375 in the Qualified Persons in Mining Resources and Reserves in accordance with the Law for Qualified Persons and its current regulation in Chile.
Mr. Gino Slanzi is a Civil Engineer. He is currently the General Manager for Inprotec SPA and Senior Consultant for Pares & Alvarez. He has worked for more than 35 years in the development of metallurgical mining projects, the optimization of production plants and on management models. He visited the site in 2022. Mr. Slanzi is a Qualified Personas defined in subpart 1300 of Regulation S-K and is registered under No.441 in the Public Registry of Qualified Persons in Mining Resources and Reserves, in accordance with the Law for Qualified Persons and its current regulation in Chile.
Transportation and Storage
The nitrate finished products are produced at our Coya Sur facilities and then transported via trucks to the Port of Tocopilla terminal where they are stored and shipped in bulk or packaged in polypropylene bags, polyethylene or polypropylene bags. The latter can also be transported and stored in an alternative port (Mejillones) for later shipment.
The potassium chloride is produced at our Salar de Atacama facilities and we transport it by truck, either to the Port of Tocopilla terminal, the Coya Sur facility or the alternative Port of Mejillones for its shipment. The product transported to Coya Sur is an intermediate product that is used as a raw material for the production of potassium nitrate. The product transported to the Port of Tocopilla or Mejillones is a final product that will be shipped or transported to the customer or affiliate. The nitrate raw material for the production of potassium nitrate in Coya Sur is currently produced at Nueva Victoria.
The lithium chloride solution, which contains a high concentration of boron, produced at our Salar de Atacama facilities, is transported to the lithium carbonate plant at the Carmen Lithium facility area where the finished lithium carbonate is produced. Part of the lithium carbonate is provided to the adjacent lithium hydroxide plant where the finished lithium hydroxide is produced. These two products are packed in packagings of distinct characteristics such as polyethylene bags, multi-layer or polypropylene FIBC big bags, stored within the same facilities and secured in storerooms. Thereafter, they are consolidated into containers that are transported by trucks to a transit warehouse or directly to port terminals for their subsequent shipment. The port terminals used are currently suited to receive container ships and are situated in Antofagasta, Mejillones and Iquique. Lithium carbonate can also be transported in packaged format both to the Port of Tocopilla and to an alternative port (Mejillones) to be shipped in break bulk format.
Iodine obtained from the same caliche used for the production of nitrates, is processed, packaged and stored exclusively in the Pedro de Valdivia and Nueva Victoria facilities. The packaging used for iodine are drums and polypropylene FIBC big bags with an internal polyethylene bag and oxygen barrier, which are consolidated into containers and sent by truck to port terminals suited for their management, principally located in Antofagasta, Mejillones and Iquique. Thereafter, they are sent to distinct markets by container ship or by truck to Santiago where iodine derivatives are produced in the Ajay-
44
SQM Chile plants. Drums and maxibags can also be transported on flat ramps to an alternative port (Mejillones) to be shipped in break bulk format.
We own and operate the port and storage facilities at the Port of Tocopilla terminal for the transportation and management of finished products and consumable materials. See “Transportation and Storage Facilities in Chile.”
Mining Concessions for the Exploration and Exploitation of Caliche Ore
We hold our mining rights for caliche ore pursuant to mining concessions for exploration and exploitation of mining resources that have been granted pursuant to applicable law in Chile:
(1) | “Mining Exploitation Concessions”: entitle us to use the land in order to exploit the mineral resources contained therein on a perpetual basis, subject to annual payments to the Chilean government; and |
(2) | “Mining Exploration Concessions”: entitle us to use the land in order to explore for and verify the existence of mineral resources for a period of two years, at the expiration of which the concession may be extended one time only for two additional years, if the area covered by the concession is reduced by half. We may alternatively request an exploitation concession in respect of the area covered by the original exploration concession, which must be made within the timeframe established by the original exploration concession. |
A Mining Exploration Concession is generally obtained for purposes of evaluating the mineral resources in a defined area. If the holder of the Mining Exploration Concession determines that the area does not contain commercially exploitable mineral resources, the Mining Exploration Concession is usually allowed to lapse. An application also can be made for a Mining Exploitation Concession without first having obtained a Mining Exploration Concession for the area involved.
As of December 31, 2022, the surface area covered by Mining Exploitation Concessions that have been granted in relation to the caliche resources of our mining sites is approximately 558,500 hectares. In addition, as of December 31, 2022, the surface area covered by Mining Exploration Concessions in relation to the caliche resources of our mining sites is approximately 400 hectares. We have not requested additional mining rights.
Salar de Atacama, Chile
The operations of SQM in the Salar de Atacama are located in the Antofagasta Region of Chile, which covers the El Loa Province and the San Pedro de Atacama commune. The Salar de Atacama Project is currently in operation for the treatment of brines to obtain lithium and potassium salts, and as such it is in a production stage. The Salar de Atacama deposits are owned by the Corporación de Fomento de la Producción (Corfo) of Chile, which grants special operating contracts or administrative leases to private companies for the extraction of brine. SQM and Albemarle have a lease agreement with Corfo to extract and produce lithium from brines stored in the Salar de Atacama deposit. Consequently, SQM must follow the terms of the agreement and also the conditions established in numerous RCA’s in order to retain operations in the Salar de Atacama. Exploration is routinely carried out within the established areas.
SQM leases an area of about 1,400 square kilometers with permission to extract brines from an area of 820 square km with two core operations. It currently produces lithium at its southwest operation. The lease was signed in 1993 and expires on December 31, 2030.
The closest cities are Calama and Antofagasta, located 160 and 230 kilometers west of the site, respectively. From Calama, the road to the site is through Route R-23, and from Antofagasta, it is via Route B-385.
SQM’s mineral resource in the Salar de Atacama is constituted by in-situ brine within a porous media, and the resource estimate depends on the brine concentration, aquifer geometry, and drainable interconnected pore volume. Within SQM’s concessions, the lithium and potassium resources were estimated based on extensive exploration and many depth-specific samples from each unit.
45
The geology in the Salar de Atacama is characterized by Paleozoic to Holocene igneous and sedimentary rocks, as well as recent unconsolidated clastic deposits and evaporitic sequences. The salt flat itself resides in a tectonic basin of recent compressive-transpressive behavior and is bounded by high angle reverse and strike-slip faults. The Salar de Atacama surface is constituted by recent evaporitic deposits, where over time the process of evaporation has precipitated salts, and surficial clastic sediments are found mainly along the salt flat margins. The salt crust is mainly composed of halite, sulfates, and occasional organic matter, with alluvial facies in the peripheral zones. Evaporitic and clastic deposits within the salt flat host brine with depth and are delimitated and cut by local fault systems; several structural blocks have been identified due to recent fault displacement.
The salar system of the Salar de Atacama basin is typical of a mature salar, with a nucleus constituted by a thick section of halite (>90%) with sulfate and a minor percentage of clastic sediments, as well as some interbedded clay sediments and sulfates over a surface area of 1,100 square kilometers and down to a depth of 900 meters. Within SQM’s concessions, mineralization includes lithium and potassium-rich brine in porous media of distinct zones and depths of the Salar de Atacama nucleus.
Facilities
Our facilities at the Salar de Atacama are located 210 kilometers to the east of the city of Antofagasta and 190 kilometers to the southeast of the city of María Elena. At this site we use brines extracted from the salar to produce potassium chloride, potassium sulfate, and lithium chloride solutions, which are subsequently sent to our lithium carbonate plant at the Carmen Lithium facility for processing. The main production plants at this site include the solar evaporations ponds systems, the potassium chloride flotation plants (MOP-H I and II), the potassium carnallite plants (PC I and PC I extension), the potassium sulfate flotation plant (SOP-H), the potassium chloride drying plant (Dual Plant or MOP-S), the potassium chloride compacting plant (MOP-G3), the potassium sulfate drying plant (SOP-S) and the potassium sulfate compacting plant (SOP-G). The energy used consists primarily of solar energy, as well as electricity, fuel and gas sources.
The Carmen Lithium facility site is located approximately 20 kilometers east of Antofagasta. The production plants at this facility include the lithium carbonate plant, with a production capacity of 180,000 tons per year, and the lithium hydroxide plant, with a production capacity of 30,000 tons per year. Lithium chloride (LiCl) solution is concentrated and purified in the lithium chemical plants through stages of contaminant removal (specifically boron, magnesium and calcium content) and conversion reaction to produce: technical grade lithium carbonate; battery grade lithium carbonate; technical grade lithium hydroxide; and battery grade lithium hydroxide. Electricity and natural gas are the main sources of energy for the operations of our Carmen Lithium facility.
The following table provides a summary of our Salar de Atacama production facilities as of December 31, 2022:
|
|
| Nominal Production |
| Weighted |
| ||||
Approximate | Capacity | Average | Gross Book | |||||||
Size | (thousands of metric | Age | Value | |||||||
Facility | Type of Facility | (hectares) (1) | tons/year) | (years) (2) | (millions of US$) (2) | |||||
Salar de Atacama(3) | Potassium chloride, potassium sulfate, lithium chloride, and boric acid production | 35,911 | Potassium chloride: 2,680 Potassium sulfate: 245 Boric acid: 15 | 13.20 | 1,592.9 | |||||
Carmen Lithium facility, Antofagasta(3) |
| Lithium carbonate and lithium hydroxide production |
| 126 |
| Lithium carbonate: 180 Lithium hydroxide: 30 |
| 7.30 |
| 504.9 |
(1) | Approximate size considers both the production facilities and the mine for the Salar de Atacama. Mining areas are those authorized for exploitation by the environmental authority and/or Sernageomin. |
(2) | Weighted average age and gross book value correspond to production facilities, excluding the mine, for the Salar de Atacama. |
(3) | Includes production facilities and solar evaporation ponds. During 2019, we began to work on the expansion of discard deposit area of the new lithium hydroxide plant and accumulation ponds. |
We directly or indirectly through subsidiaries own, lease or hold concessions over the facilities at which we carry out our operations. Such facilities are free of any material liens, pledges or encumbrances, and we believe they are suitable and adequate for the business we conduct in them.
46
Extraction Yields
The following table shows certain operating data relating to each of our Salar de Atacama operations for 2022, 2021 and 2020:
(in thousands, unless otherwise stated) |
| 2022 |
| 2021 |
| 2020 |
Salar de Atacama (1) |
|
|
| |||
Metric tons of lithium carbonate produced |
| 152.5 |
| 108.4 |
| 72.2 |
Metric tons of potassium chloride and potassium sulfate and potassium salts produced |
| 984 |
| 1,407 |
| 1,476 |
(1) | Lithium carbonate is extracted at the Salar de Atacama and processed at our facilities at the Carmen Lithium facility near Antofagasta. Potassium salts include synthetic sylvinite produced in the plant and other harvested potassium salts (natural sylvinite, carnallites and harvests from plant ponds) that are sent to Coya Sur for the production of crystallized nitrates. |
Reserves and Resources
The mineral reserve was estimated for potassium and lithium dissolved in brines of the Salar de Atacama considering modifying factors for converting mineral resources to mineral reserves, including the production wellfield design and efficiency, pumping scheme, and recovery factors for lithium and potassium. The projected future brine extraction was simulated using a groundwater flow and solute transport model. Numerical modeling was supported by a detailed calibration process and hydrogeological, geological, and hydrochemical data within the exploitation concessions. Based on the current SQM production wellfield, as of December 31, 2022, which corresponds to the effective date of mineral resource and reserve declaration that is most representative of 2022, we estimate that our proven and probable reserves of lithium and potassium are as follows:
Salar de Atacama—Summary of Mineral Reserves, Considering Process Recoveries (Effective December 31, 2022)(1),(2),(3),(4),(5),(6)
|
|
|
| Cut-off |
| |||||
Brine Volume | Amount | Grades/Qualities | grades | Metallurgical | ||||||
(Million cubic meters) | (Million metric tons) | (wt.%) | (wt.%) | recovery (%) | ||||||
Lithium |
|
|
|
|
|
|
|
|
|
|
Proven mineral reserves (Years 1-4) |
| 143 |
| 0.18 |
| 0.20 |
| 0.05 |
| 52 |
Probable mineral reserves (Years 5-8) |
| 107 |
| 0.14 |
| 0.20 |
| 0.05 |
| 52 |
Total mineral reserves |
| 250 |
| 0.32 |
| 0.20 |
| 0.05 |
| 52 |
Potassium | ||||||||||
Proven mineral reserves (Years 1-4) |
| 143 |
| 3.03 |
| 2.33 |
| 1.00 |
| 74 |
Probable mineral reserves (Years 5-8) |
| 107 |
| 2.12 |
| 2.16 |
| 1.00 |
| 74 |
Total mineral reserves |
| 250 |
| 5.15 |
| 2.26 |
| 1.00 |
| 74 |
(1) | The process efficiency is based on the type of extracted brine at each well over the course of the simulation, the average process efficiency over the entire LoM is approximately 52% for lithium and approximately 74% for potassium. |
(2) | The values in the “Amount” column correspond to contained metallic lithium (LME) and potassium. |
(3) | The average lithium and potassium concentration is weighted by the simulated extraction rates in each well |
(4) | Comparisons of values may not add due to rounding of numbers and the differences caused by averaging |
(5) | The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and the forecast to 2040, a projected lithium carbonate price of US$15,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin. |
(6) | This reserve estimate considers the modifying factors of converting mineral resources to mineral reserves, including the production wellfield design and efficiency, as well as environmental and process recovery factors. The reserve estimate also considers the expiry of the Corfo Agreements in 2030 (end of LoM). The Qualified Persons for the Mineral Reserves are Rodrigo Riquelme and Gino Slanzi. |
47
Production well locations are based on the Measured and Indicated Resource zones. Due to the mixing of brines over time, hydrogeological processes, and pumping effects, the mineral reserve was classified based on time:
● | Proven Reserves were specified for the first four years of the simulation given that the model is adequately calibrated to the 2015-2020 period, and the initial portion of the projected simulation has higher confidence due to less expected short-term changes in pumping, conceptual hydraulic parameters, and the water balance, among other factors. |
● | Probable Reserves were conservatively assigned for the last four years of the simulation considering that the numerical model will be continually improved and recalibrated in the future due to potential medium to long term changes in neighboring pumping, conceptual hydraulic parameters, and the water balance, among other factors. |
Probable reserves and inferred resources are being continually explored in order to be able to reclassify them as proven reserves and indicated or measured resources, respectively. This exploration includes systematic packer testing, chemical brine sampling, and long-term pilot production pumping tests.
Complementing the reserve information, SQM has an environmental impact assessment (RCA 226/06) which defines a maximum brine extraction until the end of the Corfo Agreements (December 31, 2030). Considering the authorized maximum net brine production rates under RCA 226/06 and voluntary reduction plan announced by SQM, which is characterized by a reduction in future pumping from 1,280 L/s to 822 L/s during the 8-year LoM, a total of approximately 250 million cubic meters of brine will be extracted from the producing wells, corresponding to 0.32 million metric tons of lithium (considering processing efficiencies).
The lithium and potassium resource were classified into three categories (Measured, Indicated, Inferred) according to the amount of information from the hydrogeological units, as well as geostatistical criteria. Hydrogeological knowledge was prioritized as the first classification criterion based on exploration, monitoring, and historical production data, while geostatistical variables were used as a secondary criterion. We estimate that our lithium and potassium resources as of December 31, 2020, which we also consider as an adequate representation of December 31, 2022, are as follows:
Salar de Atacama—Summary of Mineral Resources, Exclusive of Mineral Reserves (Effective December 31, 2022) (1),(2),(3),(4),(5),(6)
| Brine Volume |
| Amount |
|
| |||
(Million metric | (Million metric | Grades/Qualities | Cut-off grades | |||||
cubes) | tons) | (wt.%) | (wt.%) | |||||
Lithium |
|
|
|
|
|
|
|
|
Measured mineral resources |
| 2,254 |
| 5.4 |
| 0.20 |
| 0.05 |
Indicated mineral resources |
| 1,435 |
| 2.8 |
| 0.16 |
| 0.05 |
Measured + Indicated mineral resources |
| 3,689 |
| 8.2 |
| 0.18 |
| 0.05 |
Inferred mineral resources |
| 1,614 |
| 2.6 |
| 0.13 |
| 0.05 |
Potassium | ||||||||
Measured mineral resources |
| 2,254 |
| 49.8 |
| 1.80 |
| 1.00 |
Indicated mineral resources |
| 1,435 |
| 30.0 |
| 1.70 |
| 1.00 |
Measured + Indicated mineral resources |
| 3,689 |
| 79.8 |
| 1.77 |
| 1.00 |
Inferred mineral resources |
| 1,614 |
| 34.9 |
| 1.77 |
| 1.00 |
(1) | Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves upon the application of modifying factors. |
(2) | Mineral resources are reported as in-situ and exclusive of mineral reserves, where the estimated mineral reserve without processing losses during the reported LoM (A direct correlation between proven reserves and measured resources, as well as probable reserves and indicated resources was assumed. |
(3) | Effective porosity was utilized to estimate the drainable brine volume based on the measurement techniques of the SQM porosity laboratory (Gas Displacement Pycnometer). The QP considers that the high frequency sampling of effective porosity, its large dataset, and general lack of material where specific retention can be dominant permits effective porosity to be a reasonable parameter for the resource estimate. |
48
(4) | The values in the “Amount” column correspond to contained metallic lithium (LME) and potassium. |
(5) | Comparison of values may not add due to the rounding of numbers and differences caused by averaging. |
(6) | The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and the forecast to 2040, a projected lithium carbonate price of US$15,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin. |
(7) | Andrés Fock is the QP responsible for the Mineral Resources. |
Because both lithium and potassium are extracted from the same brines from the Salar de Atacama, the following discussion of changes in mineral reserves and resources in the Salar de Atacama apply to both lithium and potassium. The Salar de Atacama brine proven mineral reserves of 143 million cubic meters at December 31, 2022 decreased by 22% from 183 million cubic meters at December 31, 2021. The Salar de Atacama brine probable mineral reserves of 107 million cubic meters at December 31, 2022 remained unchanged from the amounts at December 31, 2021. The Salar de Atacama brine measured, indicated and inferred mineral resources, exclusive of reserves, of 2,254 million cubic meters, 1,435 million cubic meters and 1,614 million cubic meters at December 31, 2022, respectively, remained unchanged from the amounts at December 31, 2021 because the mineral resource exclusive of mineral reserve represents the resource in place after LoM, and none of the mineral resource declared in 2021 has been converted to mineral reserves.
In regard to the amount of Measured and Indicated Resources extracted during the 8-year LoM, the total extracted reserve without processing losses represents only 8.9% of the total Measured + Indicated Resource brine. This is more than sufficient to satisfy the requirements of RCA 226/06 and the Voluntary Extraction Reduction Plan for the project until the end of the current LoM.
The information presented in the tables above for Salar de Atacama were validated by:
Mr. Andrés Fock is a Geologist with a masters in geology and more than 18 years of experience in the field of project evaluation, resource estimation, exploration and geostatsticas for different commodities such as lithium, potassium, nitrates, copper and rare earth elements. Since 2019, Mr. Fock is a Qualified Personas defined in subpart 1300 of Regulation S-K and is registered under No. 0388 in the Public Registry of Qualified Persons in Mining Resources and Reserves, in accordance with the Law for Qualified Persons and its current regulation in Chile. As a Geologist, he has evaluated multiple lithium brine and lithium-bearing pegmatite projects. Mr. Fock acted as project manager during the preparation of the TRS for the Mt. Holland Project. Mr. Fock is an employee of SQM.
Mr. Rodrigo Riquelme Tapia is a Mining Engineer. He is currently partner and General Manager of GeoInnova, located at Antonio Bellet 444, Of. 1301, Providencia, Metropolitan Region, Chile. He has worked as a mining engineer for more than 23 years after graduation, of which 17 have been focused on resource and reserve estimation topics. Mr. Riquelme has been an external consultant for SQM since 2018, and visited the site in 2019. Mr. Riquelme is a Qualified Person as defined in subpart 1300 of Regulation S-K and is registered under No. 50 in the Public Registry of Qualified Persons in Mining Resources and Reserves, in accordance with the Law for Qualified Persons and its current regulation in Chile.
Mr. Gino Slanzi is a Civil Engineer. He is currently the General Manager for Inprotec SPA and Senior Consultant for Pares & Alvarez. Mr. Slanzi is a Qualified Person as defined in subpart 1300 of Regulation S-K and is registered under No. 441 in the Public Registry of Qualified Persons in Mining Resources and Reserves, in accordance with the Law for Qualified Persons and its current regulation in Chile. He has worked for more than 35 years in the development of metallurgical mining projects, the optimization of production plants, and on management models. He visited the site in 2021.
Mining Concessions for the Exploitation of Brines at the Salar de Atacama
As of December 31, 2022, our subsidiary SQM Salar held exclusive rights to exploit the mineral resources in an area covering approximately 140,000 hectares of land in the Salar de Atacama in northern Chile, of which SQM Salar is only entitled to exploit the mineral resources in 81,920 hectares. These rights are owned by Corfo and leased to SQM Salar pursuant to the Corfo Agreements. Corfo cannot unilaterally amend the Corfo Agreements, and the rights to exploit the resources cannot be transferred. The Corfo Agreements provides for SQM Salar to (i) make quarterly lease payments to
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Corfo based on product sales from leased mining properties and annual contributions to research and development, to local communities, to the Antofagasta Regional Government and to the municipalities of San Pedro de Atacama, María Elena and Antofagasta, (ii) maintain Corfo’s rights over the Mining Exploitation Concessions and (iii) make annual payments to the Chilean government for such concession rights. The Corfo Agreements were entered into in 1993 and expire on December 31, 2030.
Under the terms of the Corfo Agreements, Corfo has agreed that it will not permit any other person to explore, exploit or mine any mineral resources in the approximately 140,000 hectares area of the Salar de Atacama mentioned above.
SQM Salar holds an additional 241,867 hectares of constituted Mining Exploitation Concessions in areas near the Salar de Atacama, which correspond to mining reserves that have not been exploited. SQM Salar also holds Mining Exploitation Concessions that are in the process of being granted covering 3,001 hectares in areas near the Salar de Atacama.
In addition, as of December 31, 2022, SQM Salar held Mining Exploration Concessions covering approximately 9,100 hectares and has not applied for additional Mining Exploration Concessions. Exploration rights are valid for a period of two years, after which we can (i) request a Mining Exploitation Concession for the land, (ii) request an extension of the Mining Exploration Concession for an additional two years (the extension only applies to a reduced surface area equal to 50% of the initial area) or (iii) allow the concession to expire.
According to the terms of the Corfo Agreements, with respect to lithium production, the Chilean Comission on Nuclear Energy (CCHEN) established a total accumulated extraction limit set as amended by the Corfo Arbitration Agreement in January 2018, up to 349,553 metric tons of lithium metallic equivalent (1,860,670 tons of lithium carbonate equivalent), which is in addition to the approximately 64,816 metric tons of lithium metallic equivalent (345,015 tons of lithium carbonate equivalent) remaining from the originally authorized amount in the aggregate for all periods while the Corfo Agreements are in force. As of December 31, 2022, only 8 years remain on the term of the Corfo Agreements. See “Item10.C. Material Contracts – Corfo Agreements.”
The environmental permit Resolución de Calificación Ambiental (RCA No. 226/2006, issued on October 19th, 2006, by COREMA (Comisión Regional del Medio Ambiente or Regional Environmental Commission) authorizes SQM to extract brines via pumping wells from two areas in the western and southwestern portions of the areas defined in the Corfo Agreements. SQM refers to these brine extraction areas as AAE zones (Áreas Autorizadas para la Extracción or Authorized Areas of Extraction), and they are further divided based on the products historically generated in each sector: (i) The northern portion is denominated the AAE-SOP, where “SOP” signifies sulfato de potasio (potassium sulfate product), and it covers a surface area of 10,512 hectares which is equivalent to 29.27% of the total AAE area; (ii) the southern portion is referred to as AAE-MOP, where “MOP” indicates muriato de potasio (potassium chloride product), covering a surface area of 25,399 hectares that is equivalent to 70.73% of the total AAE area.
SQM routinely carries out exploration activities within the areas involved in the Corfo Agreements and authorized by the Environmental Permits. These are aimed at maintaining the amount of wells needed for production.
The water that SQM uses for its mineral production in the Salar de Atacama is obtained from wells located in the alluvial aquifer on the eastern edge of the Salar de Atacama, for which the company has rights to use groundwater as well as the corresponding environmental authorization (RCA No. 226/2006). As part of the voluntary sustainability commitment assumed by SQM in 2020, the company will reduce its water consumption by up to 50% in 2030.
SQM’s operations are subject to certain risk factors that may affect the business, financial conditions, cash flow, or SQM’s operational results, such as: the potential inability to extend or renew mineral exploitation rights in the Salar de Atacama beyond the defined expiration date (December 31, 2030) in the Corfo Agreements; risks related to being a company based in Chile; potential political risks as well as changes to the Chilean Constitution and legislation may affect development plans, production levels, and costs; and risks related to financial markets.
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Mt. Holland Lithium Project, Australia
Facilities
The Mount Holland project is an integrated lithium project in Western Australia consisting of (i) an open pit mine and lithium concentrator operation, at Mount Holland, 120 km southeast of Southern Cross, and (ii) a lithium hydroxide (LiOH) refinery located in the Town of Kwinana, 26.5 km from the port of Fremantle, from where the LiOH will be shipped.
The project is an unincorporated joint venture in which SQM owns 50% and Wesfarmers Limited, through a wholly owned subsidiary, owns the remaining 50% and is managed by Covalent Lithium Pty Ltd, an entity owned 50% by SQM and 50% by Wesfarmers.
The project is accessed by land using the Parker Range Road and Marvel Loch-Forrestania road, which are an all-season gravel road. The Parker Range road is connected to the Great Eastern Highway which is a paved road with connectivity to Southern Cross, Kalgoorlie and Perth. Also, the project has its own access by air using an airstrip and infrastructure in the southern part of the mine.
On September 11, 2017, Kidman Resources Limited (Kidman) and SQM entered into an asset sale agreement, pursuant to which SQM acquired its interest in the tenements for a total investment of SQM of US$110 million, consisting of an initial payment of US$25 million and a deferred payment of US$85 million, both payments subject to certain preceding conditions. All payments were completed by December 2018. In the asset sale agreement, the parties also agreed to form an unincorporated joint venture to mine and process spodumene ore into spodumene concentrate or lithium hydroxide. The Mt. Holland JV was established by the unincorporated joint venture agreement dated December 21, 2017, between SQM Australia and MH Gold, a then wholly owned subsidiary of Kidman Resources Limited (Kidman). Wesfarmers acquired Kidman Resources Limited in 2019, which resulted in Wesfarmers taking over Kidman Resources’ interest in the Mt Holland JV on September 23, 2019.
SQM and Wesfarmers announced a positive investment decision in February 2021 following the completion of a feasibility study by Covalent. The Mt. Holland project is currently in development stage. Most construction contracts have been awarded and are underway, including the mining contract, the concentrator plant engineering and construction contract and the refinery construction contracts.
The Mt. Holland project is focused on the exploitation of the resource in the Earl Grey pegmatite group. The Earl Grey pegmatite group consists of a main tabular pegmatite body, flanked by numerous minor dikes at both its top and bottom. The pegmatite field covers an area of up to 1 x 2 square km and a thickness of up to 100 meters. The pegmatites become progressively narrower and branched to the south and east of the main pegmatite until the main body divides into several narrower dikes. Isolated box rock enclaves are sporadically found within the pegmatite body.
The pegmatites have an approximate strike of 210° to 220° and dip of 5° to 15° to the northwest. At their western margin, the pegmatites appear to be affected by gentle folding. The dip of the pegmatites is variable, with the pegmatite steepening from sub-horizontal in the south to 10° to 15° to the northwest north of the Earl Grey gold pit.
Extensive exploration supports the characterization of the Earl Grey pegmatite, as the resource and reserve estimation, and it is comprised of surface mapping and extensive subsurface drilling carried out on the property in consideration that the pegmatite is not outcropping in the area. Exploration has predominantly been carried out by Kidman Resources since 2016, for the discovery and resource definition. Since 2020, Covalent has conducted additional diamond drilling for metallurgical sampling, grade control drilling campaigns and improvement definition of the orebody geometry in the proposed starter pit area.
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Most of the exploration holes present at Earl Grey have been drilled using standard reverse circulation (RC) drilling techniques. Diamond drilling comprises boreholes with diameters of 47.6mm, 50.5mm, 63.5mm and 85mm, which are drilled for geological, metallurgical and geotechnical purposes. Recoveries for RC drilling range from 70-90% in this geological/geomorphological setting. The recoveries for diamond drilling are in the order of 95-100%. Recoveries diminish where shear zones or other structural disturbances have been crossed. The orientation of the boreholes is at relatively sharp angles (less than 90º) and, therefore, the intersected length is not considered as a representation of the true thickness of the pegmatite; its real thickness is determined through geological models.
Resource drilling was initially conducted on broad exploration grids to determine the extent of mineralization. This was followed by a drill program on a 50 by 50 meter grid to support the resource estimate. Through the development of the Project in 2020, the first stages of the open pit were defined and the drilling program was designed for grade control based on higher density and geostatistical criteria. This information provides the design of the mine during the initial years of commissioning and supports the current definition of resources and reserves.
Reserves and Resources
Mt. Holland—Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20221
|
|
|
|
| Cut-off |
| ||||
Amount | Grades/Qualities | grades | Metallurgical recovery | |||||||
Total | SQM Attributable | |||||||||
| Mton |
| MTon | Li2O % | Li2O % | % | ||||
Proven mineral reserves |
| 21.5 |
| 10.8 |
| 1.48 |
| 0.5 |
| 75% Concentrator: 85% Refinery |
Probable mineral reserves |
| 62.4 |
| 31.2 |
| 1.60 |
| 0.5 |
| 75% Concentrator: 85% Refinery |
Total mineral reserves |
| 83.9 |
| 42.0 |
| 1.57 |
| 0.5 |
| 75% Concentrator: 85% Refinery |
(1) | Mineral reserve tonnage and grade have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. Metallurgical processes are designed for a nominal 2Mpta ore feed. Process recovery to concentrate is estimated at 75% for lithium oxide for predominantly spodumene mineralization and 0% for other mineralization types. Refinery process recovery is estimated at 85%. Tantalum recovery is estimated at 0%. A total operating cost of US$4,979 for LiOH production was considered in the reserve evaluation. The price, cost, and mass yield parameters, along with the internal constraints of the current operations, result in mineral reserves cut-off grade of 0.5% lithium oxide based on a selling lithium hydroxide price of US$ 11,000 per ton. David Billington is the QP responsible for the mineral reserves estimate with an effective date: December 15, 2021. No material changes since that date. |
Mt. Holland—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the
Fiscal Year Ended December 31, 20221
|
| Resources |
| Cut-off |
| Metallurgical |
| ||||
Amount | Grades/Qualities | grades | recovery |
| |||||||
Total | SQM Attributable |
| |||||||||
| Mton |
| MTon | Li2O % | Li2O % | % | |||||
Measured Mineral Resources |
| 27.0 |
| 13.5 |
| 1.58 |
| 0.50 |
| 75 | % |
Indicated Mineral Resources |
| 61.0 |
| 30.5 |
| 1.45 |
| 0.50 |
| 75 | % |
Measured + Indicated Mineral Resources |
| 88.0 |
| 44.0 |
| 1.49 |
| 0.50 |
| 75 | % |
Inferred Mineral Resources |
| 7.0 |
| 3.5 |
| 1.38 |
| 0.50 |
| 75 | % |
(1) | Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Resources have been reported as in situ (hard rock within optimized pit shell). Pit optimization and economics for derivation of cut-off grade include mine gate pricing of US$ 800 per ton of 6% Li2O concentrate, AU$19 per bcm mining cost (LoM average cost-variable by depth), AU$65 processing cost per ton. Mining dilution set at 5% and recovery at 95%. Royalty fees 5%. The optimization considered for the concentrator is 75%. Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of 0.75AU$:1.00US$. These economics define a cut-off grade of 0.50% lithium oxide. Kerry Griffin is the QP responsible for the mineral resource estimate with an effective date: October 6, 2021. No material changes since that date. |
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Mt. Holland—Summary of Mineral Resources Inclusive of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20221
|
|
| Resources |
| Cut-off |
| Metallurgical |
| |||
Amount | Grades/Qualities | grades | recovery |
| |||||||
Total | SQM Attributable |
| |||||||||
| Mton |
| MTon | Li2O % | Li2O % | % | |||||
Measured Mineral Resources |
| 71.0 |
| 35.5 |
| 1.57 |
| 0.5 |
| 75 | % |
Indicated Mineral Resources |
| 107.0 |
| 53.5 |
| 1.51 |
| 0.5 |
| 75 | % |
Measured + Indicated Mineral Resources |
| 178.0 |
| 89.0 |
| 1.54 |
| 0.5 |
| 75 | % |
Inferred Mineral Resources |
| 8.0 |
| 4.0 |
| 1.44 |
| 0.5 |
| 75 | % |
(1) | Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. Mineral resources are reported inclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Resources have been reported as in situ (hard rock within optimized pit shell). Pit optimization and economics for derivation of cut-off grade include mine gate pricing of US$ 800 per ton of 6% Li2O concentrate, AU$19 per bcm mining cost (LoM average cost-variable by depth), AU$65 processing cost per ton. Mining dilution set at 5% and recovery at 95%. Royalty fees 5%. The optimization considered for the concentrator is 75%. Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of 0.75AU$:1.00US$. These economics define a cut-off grade of 0.50% Li2O. Kerry Griffin is the QP responsible for the mineral resource estimate with an effective date: October 6, 2021. No material changes since that date. |
The Mt. Holland lithium project proven and probable mineral reserves attributable to SQM of 10.8 million tonnes and 31.2 million tonnes at December 31, 2022, respectively, remained unchanged from the amounts at December 31, 2021. The Mt. Holland lithium project measured, indicated and inferred mineral resources, exclusive of reserves, of 13.5 million tonnes, 30.5 million tonnes and 3.5 million tonnes at December 31, 2022, respectively, remained unchanged from the amounts at December 31, 2021. These mineral reserve and mineral resource amounts were unchanged because the Mt. Holland lithium project is still in construction. The work done through December 31, 2022, was focused on pre-striping, the concentrator and refinery construction.
Mining Rights
The Mt. Holland lithium project development envelope for the Mine and Concentrator is spread across three core mining tenements (M77/1065, M77/1066 and M77/1080), as well as exploration licenses, general purpose licenses and miscellaneous licenses (Project Tenements), covering an approximate area of 4,606 hectares.
The majority of the project properties are currently registered in equal parts to MH Gold, an affiliate of Wesfarmers Limited, and SQM Australia, an affiliate of SQM. Other exploration rights in the Mt. Holland project are held by MH Gold Pty Ltd or Montague Resources Australia Pty Ltd, both of which are ultimately controlled by Wesfarmers Chemicals, Energy and Fertilizers (WesCEF). The project is a joint venture, in which SQM owns 50% and Wesfarmers Limited owns the remaining 50% (the “Mt. Holland Joint Venture”), and is managed by Covalent Lithium Pty Ltd (“Covalent”), a entity owned 50% by SQM and 50% by Wesfarmers. Covalent is neither the registered owner nor the applicant of the project properties under the Mining Act 1978 (WA) (Mining Act).
The information presented in the following table (Mt. Holland project) has been validated by the following Qualified Persons:
Mr. David Billington is a mining engineer with a BE in Mining, he has over 35 years of experience in mine planning, mine operations and management and project evaluation and consulting, for different commodities (Li, Ta, Sn, Fe2O3, Au, Cu, REE). As a mining engineer, he has worked at pegmatite projects producing Lithium for 10 years and evaluated multiple lithium pegmatite projects. He is a member of the Australasian Institute of Mining and Metallurgy (AUSIMM), 109676. He meets the experience criteria as competent person for Ore Reserves is style of mineralization as set out by the AUSIMM’s Joint Ore Reserve Committee (JORC). He is a Qualified Person as defined by subpart 1300 of Regulation S-
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K. Mr. Billington is an employee of Covalent Lithium, a joint venture between SQM and Wesfarmers Ltd. He is responsible for the reserve estimation for the Mt. Holland lithium project.
Mr. Kerry Griffin is a qualified Geologist and has over 28 years of extensive hands-on experience in mine geology, mine development and management, designing and managing large scale exploration and resource drilling programs, resource modelling and estimation, the management and training of geological/technical teams in Australia, Africa, South/Central America, Central and SE Asia including more than 22 years in senior or management positions. His experience in lithium pegmatites includes exploration, resource development and mining in Australia, Southern Africa, and South America and as such, Mr. Griffin meets the experience criteria as a competent person for Ore Resources in this style of mineralization as set out by the AUSIMM’s Joint Ore Reserve Committee (JORC). He is a Qualified Person as defined by subpart 1300 of Regulation S-K. He is a current member of the Australian Institute of Geoscientists (3521) and the Society of Economic Geology. Mr. Griffin was employed by Mining Plus Ltd when the resource estimates were calculated. He is currently employed by Global Commodity Solutions. He is responsible for the resource estimation for the Mt. Holland Lithium Project.
Mr. Andrés Fock is a Geologist and MSC in Geology, with 18 years of experience in project evaluation, resource estimation, exploration and geostatistics, for different commodities such as lithium, potassium, nitrates, iodine, copper and rare earth elements. Since 2019, he is a Qualified Person as defined in subpart 1300 of Regulation S-K and is registered with No. 0388 in the Public Registry of Qualified Persons in Mining Resources and Reserves, in accordance with the Law for Qualified Persons and its current regulation in Chile. As a geologist, he has evaluated multiple lithium brine and lithium bearing pegmatite projects. Mr. Fock acted as project manager during preparation of the Technical Report Summary for the Mt. Holland Project. Mr. Fock is an employee of SQM.
Transportation and Storage Facilities in Chile
The transportation of our products is carried out by trucks that are operated by dedicated third parties through long-term contracts. Furthermore, we own port and storage facilities for the transportation and management of finished products and consumable materials.
Our main centers for the production and storage of raw materials are the Nueva Victoria, Coya Sur and Salar de Atacama facilities. Other facilities include chemical plants for the finished products of lithium carbonate and lithium hydroxide at the Carmen Lithium facility. The Port of Tocopilla terminal, which we own, is the principal facility for the storage and shipment of our bulk products and packaged potassium chloride (MOP), nitrates and lithium carbonate.
The Port of Tocopilla terminal facilities cover approximately 22 hectares and are located approximately 186 kilometers north of Antofagasta, approximately 124 kilometers west of María Elena and Coya Sur and 372 kilometers to the west of Salar de Atacama. Our affiliate, Servicios Integrales de Tránsitos y Transferencias S.A. (SIT), operates facilities for the shipment of products and the delivery of certain raw materials based on renewable concessions granted by Chilean regulatory authorities, provided that the facilities are used in accordance with the authorization granted and we pay an annual concession fee. The facilities include a truck weighing machine that confirms product entry into the port and transfers the product to distinct storage zones, a piezometer within the shipping system to carry out bulk product loaded onto ships, a crane with a 40-ton capacity for the loading of sealed product onto ships and a nitrate mixing facility.
The storage facilities consist of a system of six silos, with a total storage capacity of 55,000 metric tons, and a mixed storage area of open and covered storehouses with a total storage capacity of approximately 250,000 metric tons. In addition, to fulfill future storage needs, we will continue to make investments in accordance with the investment plan outlined by management. The products are also put into bags at the Port of Tocopilla terminal facilities where the bagging capacity is established by two bag packaging machines, one for sacks and polypropylene FIBC big bags and one for FFS polyethylene. The products that are packaged in Tocopilla may be subsequently shipped at the same port or may also be consolidated into trucks or containers for its subsequent dispatch to clients by land or sea through containers from other ports, principally located in Antofagasta, Mejillones and Iquique.
For the transportation of bulk product, the transportation belt system extends across the coastline to deliver products directly to the hatches of bulk cargo ships. The nominal load capacity of this shipping system is 1,200 tons per hour. The
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transportation of packaged product is carried out utilizing the same bulk cargo ships using barges without motors located in the dock and loaded by a crane with a 40 ton capacity from the Port of Tocopilla terminal. Thereafter, they are towed and unloaded using ship cranes to the respective warehouses.
We normally contract bulk cargo ships to transfer the product from the Port of Tocopilla terminal to our hubs around the world or to clients directly, who, in certain instances, use their own contracted vessels for delivery.
Tocopilla processes related to the reception, handling, storage and shipment of bulk/packaged nitrates produced at Coya Sur are certified by the third-party organization TÜV-Rheinland under the quality standard ISO 9001:2015.
Computer System
We have information systems and a management information system (Enterprise resource planning or ERP) to support the administrative business processes or support of the company: Finance, Accounting, Human Resources and Logistics (IT), this does not include production systems, plant operation, extraction and maintenance (OT). The ERP and main system is located in Chile; although each commercial office has its own ERP that is later consolidated in the central system in Chile.
The computer and information system is used mainly for finance, accounting, human resources, monitoring of supplies and inventories, billing, quality control, research activities and production process and maintenance control. The mainframe computing system is located at our offices in Santiago and our Chilean and international subsidiaries are interconnected with each other, through data links.
In addition, we have cloud technologies, which allow us to support new business processes and respond quickly and at low cost to changing conditions of our business and of the market.
In relation to information security and cybersecurity, we are executing a plan in accordance with the strategic objectives of the business to safeguard the most important assets defined in the corporate risk meetings. This implies making our users aware of the best use of processes and computing (awareness) and working to comply with standards, as well as having high information security standards with world-class tools that mitigate potential attacks on our infrastructure.
Internal Controls
The preparation of mineral reserve and resource estimates is completed in accordance with our prescribed internal control procedures, which are designed specifically to ensure the reliability of such estimates presented herein. Annually, QPs and other employees review the estimates of mineral reserves and mineral resources, the supporting documentation, and compliance with applicable internal controls. Such controls employ management systems, standardized procedures, workflow processes, multi-functional supervision and management approval, internal and external reviews, reconciliations, and data security covering record keeping, chain of custody and data storage.
The internal controls for reserve and resource estimates also cover exploration activities, sample preparation and analysis, data verification, processing, metallurgical testing, recovery estimation, mine design and sequencing, and reserve and resource evaluations, with environmental, social and regulatory considerations. The quality assurance and control protocols over the assaying of drill hole samples are performed by reputable commercial laboratories following certification and accreditation programs established by the American Society for Testing and Materials (ASTM) or Australian National Association of Testing Authorities (NATA).
The reserve and resource estimates have inherent risks due to data accuracy, uncertainty from geological interpretation, mine plan assumptions, uncontrolled rights for mineral and surface properties, environmental challenges, uncertainty for future market supply and demand, and changes in laws and regulations. Management and QPs are aware of those risks that might directly impact the assessment of mineral reserves and resources. The current mineral reserves and resources are estimated based on the best information available and are subject to re-assessment when conditions change. Refer to Item 4A. “Risk Factors” for discussion of risks associated with the estimates of our mineral reserves and resources.
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ITEM 8. FINANCIAL INFORMATION
8.A. Consolidated Statements and Other Financial Information
8.A.1 See “Item 18. Financial Statements.”
8.A.2 See “Item 18. Financial Statements.”
8.A.3 See “Item 19. Exhibits—Index to Financial Statements—Report of Independent Registered Public Accounting Firm.”
8.A.4 Not applicable.
8.A.5 Not applicable.
8.A.6 Export Sales
We derive most of our revenues from sales outside of Chile. The distribution of sales presented below reflects the location of the Company’s subsidiaries making such sales and does not necessarily reflect the final destination of the products sold.
The following is the composition of the consolidated sales for the periods ending on December 31, 2022, 2021 and 2020:
Th. US$ |
| 2022 |
| 2021 |
| 2020 |
|
Foreign sales |
| 10,487,430 | 2,642,672 | 1,663,446 | |||
Total sales |
| 10,710,578 |
| 2,862,320 |
| 1,817,919 | |
Foreign sales % | 97.9 | % | 92.3 | % | 91.5 | % |
8.A.7 Legal Proceedings
SQMNA Litigation
In October 2010, the City of Pomona, California, named SQM North America Corporation (“SQMNA”) and SQM as defendants in an action filed in the California Superior Court for Los Angeles County (the “Pomona Case”). In this matter, the plaintiff seeks damages for alleged groundwater contamination from the use of defendants’ fertilizer products. The plaintiff subsequently withdrew its lawsuit against SQM. The case was removed to the U.S. District Court for the Central District of California and on June 10, 2015, the jury rejected the lawsuit against SQMNA, and the plaintiff filed an appeal which was granted by the Ninth Circuit Court of Appeals. The matter was then remanded to the District Court for a complete retrial. On May 17, 2018, after a new trial in the District Court, a jury ruled in favor of SQMNA. On September 8, 2021, a jury found in favor of Pomona and against SQMNA on a single cause of action for strict products liability under California law. The jury found that Pomona’s damages were US$48,128,378. On January 27, 2022, the District Court entered judgment for Pomona in the amount of US$48,128,378. On February 24, 2022, SQMNA filed a motion for new trial, which was refiled to address a purported procedural issue on February 25, 2022; the District Court has not ruled on the merits of the motion. On February 25, 2022, SQMNA filed a notice of appeal of the District Court judgment to the Ninth Circuit Court of Appeals.
In October 2010, the City of Lindsay, California, named SQM and SQMNA as defendants in an action filed in the California Superior Court for Tulare County. In this matter, the plaintiff seeks damages for alleged groundwater contamination from the use of defendants’ fertilizer products. This case was removed to the U.S. District Court for the Eastern District of California and is pending in the trial court. The proceeding has been suspended, pending the outcome of the Pomona Case. SQMNA and SQM intend to vigorously defend this action.
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Other Matters
In addition, various lawsuits, claims and proceedings, other than those specifically disclosed above, have been or may be instituted or asserted against the Company, relating to the conduct of the company’s business, including those pertaining to mining, civil, tort, commercial, labor and regulatory matters, among others. Although the outcome of other litigation cannot be predicted with certainty, and some lawsuits, claims or proceedings may be disposed of unfavorably to the Company, our management believes the disposition of such other pending matters will not have a material effect on the company’s business, financial condition, results of operations or cash flows.
8.A.8. Dividend Policy
As required by Chilean law and regulations, our dividend policy is decided upon from time to time by our Board of Directors and is announced at the Annual General Shareholders’ Meeting, which is generally held in April of each year. Shareholder approval of the dividend policy is not required. However, each year the Board must submit the declaration of the final dividend or dividends in respect of the preceding year, consistent with the then-established dividend policy, to the Annual General Shareholders’ Meeting for approval. As required by the Chilean Corporations Act, unless otherwise decided by unanimous vote of the holders of issued shares, we must distribute a cash dividend in an amount equal to at least 30% of our consolidated net income for that year (determined in accordance with CMF regulations), unless and to the extent the Company has a deficit in retained earnings.
On March 23, 2022, the Board of Directors, agreed to recommend to the shareholders the payment of a final dividend. The dividend payment was presented for consideration and approved at the Annual General Shareholders’ Meeting held on April 26, 2022. The amount of the final dividend approved by shareholders was US$2.0496418 per share; the amounts paid as interim dividend and special dividends was deducted from this amount; the balance, in the amount of US$0.09691 per share, was paid and distributed to Company’s shareholders on May 5, 2022.
SQM’s dividend policy for 2022 reported at the Annual General Shareholders’ Meeting held on April 26, 2022 and modified as a result of the approval of the distribution and payment of a special dividend equivalent to US$1.40037 per share charged to the retained earnings of the Company (the “Special Dividend”) by the Extraordinary Shareholders’ Meeting held on December 21, 2022, included the following:
(a) | Distribute and pay to the corresponding shareholders, a percentage of the net income that shall be determined per the following financial parameters as a final dividend (dividendo definitivo): |
(i) | 100% of the 2022 net income, when the following financial parameters are met: (a) that the total current assets, divided by the total current financial liabilities is equal to or greater than 2.5 times, and (b) the sum of the total current liabilities and total non-current liabilities, excluding both cash and cash equivalents and other current financial assets, divided by the total equity is equal to or less than 0.85 times. |
(ii) | 80% of the 2022 net income, when the following financial parameters are met: (a) that the total current assets, divided by the total sum of the total current financial liabilities is equal to or greater than 2.0 times, and (b) the total sum of the current liabilities and total non-current liabilities, excluding both cash and cash equivalents and other current financial assets divided by the total equity is equal to or less than 0.95 times. |
(iii) | 60% of the 2022 net income, when the following financial parameters are met: (a) that the total current assets, divided by the total sum of the total current financial liabilities is equal to or greater than 1.5 times, and (b) the total sum of the current liabilities and total non-current liabilities, excluding both cash and cash equivalents and other current financial assets divided by the total equity is equal to or less than 1.05 times. |
(iv) | If none of the foregoing financial parameters are met, the Company shall distribute and pay 50% of the 2021 net income in favor of the respective shareholders as a final dividend. |
(b) | Distribute and pay only two interim dividends during 2022, which will be charged against the aforementioned final dividend and that will be charged to the retained earnings reflected in the consolidated financial statements as of March 31, 2022 and as of June 30, 2022, respectively, the percentage distributed shall be determined per the financial parameters expressed in paragraph (a) above. |
57
On May 19, 2022 and August 18, 2022, the Company’s Board of Directors agreed to distribute and pay an interim dividends equivalent to US$0.23797 per share and US$0.31439 per share, respectively, both charged to the Company’s 2022 retained earnings. These amounts were paid in their equivalent in Chilean pesos according to the official exchange rate on May 28, 2022 and on September 1, 2022, respectively (the “Interim Dividends”).
(c) | The Board of Directors will not approve the payment of other interim dividends charged against the 2022 net income. |
(d) | At the Ordinary General Shareholders’ Meeting that will be held in 2023, the Board of Directors will propose a final dividend pursuant to the percentages in financial parameters described in in paragraph (a) above after deducting the Special Dividend and Interim Dividends previously paid. If the amount is equal to or less than the amount of the sum of the Special Dividend and the Interim Dividends, then no additional amount will be distributed and the Interim Dividends will be understood to be paid as a definitive dividend. In any case, the final dividend may not be less than the mandatory minimum dividend that corresponds in accordance with Chilean law or the Company bylaws. |
(e) | If there is an excess of net income in 2022, this may be retained and assigned or allocated for financing its own operations, to one or more investment projects of the Company, notwithstanding a future distribution of special dividends (dividendos eventuales) charged to the retained earnings previously approved at the shareholders’ meeting, or the possible and future capitalization of all or part of the latter. |
(f) | The payment of additional dividends (dividendos adicionales) is not considered. |
It is expressly stated that the dividend policy described above corresponds to the intention of the Board of Directors, and the compliance of it shall depend on the net income that the Company ultimately obtains, as well as the results of projections that could periodically impact the Company, or to the existence of determined conditions that may affect it, as applicable. If the dividend policy exposed by the Board of Directors suffers a substantial change, the Company must communicate it as an essential fact (hecho esencial).
On December 22, 2022, the Extraordinary Shareholders’ Meeting approved the payment of a special dividend equivalent to US$1.400037 per share, charged to the retained earnings of the Company. This amount was paid on December 30, 2022 in its equivalent in Chilean pesos according to the official exchange rate on December 28, 2022.
The dividend policy proposal for 2023 is expected to be announced at the Annual General Shareholders’ Meeting to be held on April 26, 2023.
We generally declare dividends in U.S. dollars (but may declare dividends in Chilean pesos) and pay such dividends in Chilean pesos. When a dividend is declared in U.S. dollars, the exchange rate to be used to convert the dividend into Chilean pesos is decided by the shareholders at the meeting that approves the dividend, which has usually been the Observed Exchange Rate on the date the dividend is declared. In the case of interim dividends, the exchange rate to be used is the Observed Exchange Rate published a minimum of five business days before the payment date.
Holders of ADSs generally have the right to receive dividends and other distributions we make on Series B common shares held by the ADS custodian under the terms of the deposit agreement in proportion to the number of ADSs held as of the specified record date, after deduction of the applicable fees, taxes and expenses. Receipt of these dividends and distributions may be limited by practical considerations and legal limitations, which may delay the payment and receipt of dividends and distributions by ADS holders.
The depositary will, as promptly as practicable, convert all cash dividends and other cash distributions received by the depositary or the custodian in respect of the deposited Series B common shares into U.S. dollars and, as promptly as practicable, distribute the amount thus received (net of any fees of the depositary) to the holders of ADSs in proportion to the number of ADSs representing such Series B Shares held by each of them. The amount distributed also will be reduced by any amounts required to be withheld by SQM, the depositary or the custodian on account of taxes and the depositary’s foreign currency conversion expenses.
58
The amount and timing for payment of dividends is subject to revision from time to time, depending upon our then current level of sales, costs, cash flow and capital requirements, as well as market conditions. Accordingly, there can be no assurance as to the amount or timing of declaration or payment of dividends in the future. Any change in dividend policy would ordinarily be effective for dividends declared in the year following adoption of the change, and a notice as to any such change of policy must be filed with Chilean regulatory authorities and would be publicly available information.
Dividends
Each Series A common share and Series B common share is entitled to share equally in any dividends declared on the outstanding capital stock of SQM.
The following table shows the U.S. dollar equivalent of dividends per share and per ADS paid in each of the years indicated, based on the Observed Exchange Rate for the date on which the dividend was declared.
Dividends |
| Per Share |
| Per ADS | ||
Declared for the fiscal year | Paid in | Ch$ | US$ | |||
2018 (interim) |
| 2018 | 229.22 | 0.37994 | ||
2018 (interim) |
| 2018 | 271.73 | 0.43247 | ||
2018 (interim) |
| 2018 | 343.53 | 0.50864 | ||
2018 |
| 2019 | 212.38 | 0.31726 | ||
n/a (eventual) |
| 2019 | 277.70 | 0.41274 | ||
2019 (interim) |
| 2019 | 215.25 | 0.30598 | ||
2019 (interim) |
| 2019 | 192.19 | 0.26669 | ||
2019 (interim) |
| 2019 | 190.39 | 0.22987 | ||
2019 |
| 2020 | 217.67 | 0.25414 | ||
2020 (interim) |
| 2020 | 138.91 | 0.17092 | ||
2020 (interim) |
| 2020 | 297.95 | 0.37994 | ||
2020 (interim) |
| 2020 | 10.79 |
| 0.01530 | |
2020 |
| 2021 | 173.82 |
| 0.23797 | |
2021 (interim) |
| 2021 | 243.70 |
| 0.31439 | |
n/a (eventual) |
| 2021 | 1,202.34 |
| 1.40037 | |
2021 |
| 2022 |
| 82.46 |
| 0.09691 |
2022 (interim) |
| 2022 |
| 2,267.02 |
| 2.78716 |
2022 (interim) |
| 2022 |
| 1,776.62 |
| 1.84914 |
n/a (eventual) |
| 2022 |
| 2,653.93 |
| 3.08057 |
Dividends payable to holders of ADSs will be paid net of conversion expenses of the Depositary and will be subject to Chilean withholding tax, currently imposed at the rate of 35% (subject to credits in certain cases).
As a general requirement, a shareholder who is not a resident of Chile must register as a foreign investor under one of the foreign investment regimes contemplated by Chilean law to have dividends, sale proceeds or other amounts with respect to its shares remitted outside Chile through the Formal Exchange Market. Under the Foreign Investment Contract, the Depositary, on behalf of ADS holders, will be granted access to the Formal Exchange Market to convert cash dividends from Chilean Pesos to U.S. dollars and to pay such U.S. dollars to ADS holders outside Chile net of taxes, and no separate registration of ADS holders is required.
8.B. Significant Changes
No significant change has occurred since the date of the financial statements set forth in Item 18.
59
PART III
ITEM 18. FINANCIAL STATEMENTS
For a list of all financial statements filed as part of this Form 20-F Annual Report, see “Item 19. Exhibits.”
ITEM 19. EXHIBITS
(a) Index to Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID |
| F-2 |
Consolidated Financial Statements: | ||
Audited Consolidated Statements of Financial Position as of December 31, 2022 and 2021 | F-5 | |
F-7 | ||
F-8 | ||
F-9 | ||
F-11 | ||
F-14 | ||
Supplementary Schedules* |
* All other schedules have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto.
60
(b) Exhibits
Exhibit No. |
| Exhibit |
1.1 | ||
2.1 | ||
8.1 | ||
10.1 | ||
10.2 | ||
10.3 | ||
12.1 | ||
12.2 | ||
13.1 | ||
13.2 | ||
23.1 | ||
23.2. | ||
23.3 | ||
23.4 | ||
23.5 | ||
23.6 | ||
23.7 |
61
23.8. | ||
23.9 | ||
23.10 | ||
23.11 | ||
23.12 | ||
23.13 | ||
96.1 | ||
96.2 | ||
96.3 | ||
96.4 | ||
99.1 | ||
99.2 | ||
101.INS | Inline XBRL Instance Document - The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Inline Cover Page Interactive Data File – The Cover Page |
The Company will furnish to the Securities and Exchange Commission, upon request, copies of any instruments that define the rights of holders of its long-term debt not filed herewith.
62
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 on its behalf.
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
(CHEMICAL AND MINING COMPANY OF CHILE INC.)
/s/ Gerardo Illanes
Gerardo Illanes G.
Chief Financial Officer
Date: July 27, 2023
63
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A. AND SUBSIDIARIES
Index to Consolidated Financial Statements
Contents
| F-2 | |
Consolidated Financial Statements | ||
Audited Consolidated Statements of Financial Position as of December 31, 2022 and 2021 | F-5 | |
F-7 | ||
F-8 | ||
F-9 | ||
F-11 | ||
F-14 |
Ch$ | - | Chilean pesos |
ThCh$ | - | Thousands of Chilean pesos |
US$ | - | United States dollars |
ThUS$ | - | Thousands of United States dollars |
UF | - | The UF is an inflation-indexed, Chilean peso-denominated monetary unit. The UF rate is set daily in advance, based on the change in the Consumer Price Index of the previous month |
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Sociedad Química y Minera de Chile S.A.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of Sociedad Química y Minera de Chile S.A. and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, changes in equity and, cash flows for each of the three years in the period ended December 31 2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15 Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
F-2
and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Bulk Inventories Volume
As described in Notes 3.15, 3.34 and 10 to the consolidated financial statements, the Company’s consolidated products in progress and finished products inventories balances at December 31, 2022 amounted to US$591 million and US$1,098 million, respectively, which included bulk inventories amounting to US$ 122 million and US$199 million, respectively. The accounting process the Company uses to record products in progress and finished products bulk inventories volume relies on significant estimates primarily relating to topography measures and product density. To assist in validating the reasonableness of these estimates, management periodically reviews product density and performs cyclical physical inventory during the year and an annual physical inventory.
The principal considerations for our determination that performing procedures relating to the bulk inventories volume is a critical matter are (i) the significant judgment by management in determining the products in progress and finished products bulk inventories volume; (ii) a high degree of auditor judgment, subjectivity, and effort in performing our audit procedures and in evaluating audit evidence related to the estimates made by management; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the estimation of inventories volumes, including controls over management’s physical inventory process and the determination of the product density. These procedures also included, among others, observing management’s physical inventory and assessing rollforward activity between the time of the inventory and year-end. Professionals with specialized skill and knowledge were used to assist in the evaluation of management’s topography measures, assess the reasonableness of management’s determination of the product density and observe management’s annual physical inventory.
Litigation - Environmental, Tax and Legal Contingencies
As described in Notes 3.27, 3.34, and 20 to the consolidated financial statements, provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the obligation amount can be made. No provision for an estimated loss is recorded in the consolidated financial statements for unfavorable outcomes when, after assessing the information available, (i) management concludes that it is not probable that a loss has been incurred in any of the pending litigation; or (ii) management is unable to reliably estimate the loss for any of the pending matters. The Company also
F-3
discloses the contingency in circumstances where management concludes no loss is probable or reliably estimable, but it is reasonably possible that a loss may be incurred.
The principal considerations for our determination that performing procedures relating to the environmental, tax and legal contingencies is a critical audit matter are the significant judgment by management when assessing the likelihood of a loss being incurred and when determining whether a reliable estimate of the loss can be made, which in turn led to a high degree of auditor judgment and effort in evaluating management’s assessment of the loss contingencies associated with environmental, tax and legal matters.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s evaluation of the environmental, tax and legal contingencies, including controls over determining whether a loss is probable and whether the amount of loss can be reliably estimated, as well as consolidated financial statement disclosures. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsels, evaluating the reasonableness of management’s assessment regarding unfavorable outcomes, and evaluating the sufficiency of the Company’s litigation contingency disclosures.
/s/
April 25, 2023, except for the effects of the revision discussed in Note 2.2.1 (b) to the consolidated financial statements, as to which the date is July 27, 2023.
We have served as the Company’s auditor since 2011
F-4
Consolidated Statements of Financial Position
|
| As of |
| As of | ||
December 31, | December 31, | |||||
ASSETS | Note N° | 2022 | 2021 | |||
|
| ThUS$ |
| ThUS$ | ||
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
| 9.1 |
| |
| |
Other current financial assets |
| 12.1 |
| |
| |
Other current non-financial assets |
| 16 |
| |
| |
Trade and other receivables, current |
| 12.2 |
| |
| |
Trade receivables due from related parties, current |
| 11.5 |
| |
| |
Current inventories |
| 10 |
| |
| |
Current tax assets |
| 25.1 |
| |
| |
Total current assets other than those classified as held for sale or disposal |
| |
| | ||
Non-current assets or groups of assets classified as held for sale |
| |
| | ||
Total non-current assets held for sale |
| |
| | ||
Total current assets |
| |
| | ||
Non-current assets |
|
|
|
|
|
|
Other non-current financial assets |
| 12.1 |
| |
| |
Other non-current non-financial assets |
| 16 |
| |
| |
Non-current trade receivables |
| 12.2 |
| |
| |
Investments classified using the equity method of accounting |
| 7.1-8.1 |
| |
| |
Intangible assets other than goodwill |
| 14.1 |
| |
| |
Goodwill |
| 14.1 |
| |
| |
Property, plant and equipment, net |
| 15.1 |
| |
| |
Right-of-use assets |
| 13.1 |
| |
| |
Non-current tax assets |
| 25.1 |
| |
| |
Deferred tax assets | 25.3 | | | |||
Total non-current assets |
| |
| | ||
Total assets |
| |
| |
The accompanying notes form an integral part of these consolidated financial statements.
F-5
Consolidated Statements of Financial Position
|
| As of |
| As of | ||
December 31, | December 31, | |||||
Liabilities and Equity | Note N° | 2022 | 2021 | |||
|
| ThUS$ |
| ThUS$ | ||
Current liabilities | ||||||
Other current financial liabilities |
| 12.4 |
| |
| |
Lease liabilities, current |
| 13.2 |
| |
| |
Trade and other payables, current |
| 12.5 |
| |
| |
Other current provisions |
| 18.1 |
| |
| |
Current tax liabilities |
| 25.2 |
| |
| |
Provisions for employee benefits, current |
| 17.1 |
| |
| |
Other current non-financial liabilities |
| 18.3 |
| |
| |
Total current liabilities |
| |
| | ||
Non-current liabilities |
|
|
|
| ||
Other non-current financial liabilities |
| 12.4 |
| |
| |
Non-current lease liabilities |
| 13.2 |
| |
| |
Non-current trade and other payables |
| 12.5 |
| — |
| |
Other non-current provisions |
| 18.1 |
| |
| |
Deferred tax liabilities |
| 25.3 |
| |
| |
Non-current provisions for employee benefits |
| 17.1 |
| |
| |
Total non-current liabilities |
| |
| | ||
Total liabilities |
| |
| | ||
Equity |
|
|
|
| ||
Equity attributable to owners of the Parent |
| 19 |
|
|
|
|
Share capital |
| |
| | ||
Retained earnings |
| |
| | ||
Other reserves |
| ( |
| ( | ||
Equity attributable to owners of the Parent |
| |
| | ||
Non-controlling interests |
| |
| | ||
Total equity |
| |
| | ||
Total liabilities and equity |
| |
| |
The accompanying notes form an integral part of these consolidated financial statements.
F-6
Consolidated Statements of Income
For the period from January to December of the year | ||||||||
Consolidated Statements of Income |
| Note N° | 2022 | 2021 | 2020 | |||
|
| ThUS$ |
| ThUS$ |
| ThUS$ | ||
Revenue |
| 21.1 |
| |
| |
| |
Cost of sales |
| 21.2 |
| ( |
| ( |
| ( |
Gross profit |
| |
| |
| | ||
Other income |
| 21.3 |
| |
| |
| |
Administrative expenses |
| 21.4 |
| ( |
| ( |
| ( |
Other expenses |
| 21.5 |
| ( |
| ( |
| ( |
(Impairment) reversal of value of financial assets impairment losses |
| 21.7 |
| |
| ( |
| |
Other gains (losses) |
| 21.6 |
| |
| ( |
| ( |
Profit from operating activities |
| |
| |
| | ||
Finance income |
| 21.10 |
| |
| |
| |
Finance costs |
| 15-21.9 |
| ( |
| ( |
| ( |
Share of profit of associates and joint ventures accounted for using the equity method |
| 7.1-8.1 |
| |
| |
| |
Foreign currency translation differences |
| 24 |
| ( |
| ( |
| ( |
Profit before taxes |
| |
| |
| | ||
Income tax expense |
| 25.3 |
| ( |
| ( |
| ( |
Net profit |
| |
| |
| | ||
Profit attributable to: |
|
|
|
|
|
|
|
|
Profit attributable to Owners of the Parent |
| |
| |
| | ||
Profit attributable to Non-controlling interests |
| |
| |
| | ||
| | | ||||||
Basic earnings per share (US$ per share) | 3.26 | | | | ||||
Diluted earnings per share (US$ per share) | 3.26 |
| |
| |
| |
The accompanying notes form an integral part of these consolidated financial statements.
F-7
Consolidated Statements of Comprehensive Income
For the period from January to December of the year | ||||||
Consolidated Statements of Comprehensive Income |
| 2022 |
| 2021 |
| 2020 |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Net profit |
| |
| |
| |
Items of other comprehensive income that will not be reclassified to profit for the year, before taxes |
|
|
|
|
|
|
(Losses) gains from measurements of defined benefit plans |
| ( |
| |
| |
Gains (losses) from financial assets measured irrevocably at fair value through other comprehensive income |
| |
| ( |
| |
Total other comprehensive income that will not be reclassified to profit for the year, before taxes |
| ( |
| ( |
| |
Items of other comprehensive income that will be reclassified to profit for the year, before taxes |
|
|
|
|
|
|
Foreign currency exchange gains from joint ventures and associates |
| ( |
| |
| |
Cash flow hedges- effective portion of changes in far value | | ( | ( | |||
Cash flow hedges-reclassified to profit or loss |
| ( |
| |
| ( |
Total other comprehensive income that will be reclassified to profit for the year |
| |
| ( |
| |
Other items of other comprehensive income, before taxes |
| |
| ( |
| |
Income taxes related to items of other comprehensive income that will not be reclassified to profit for the year |
|
|
|
|
|
|
Income tax benefit (expense) relating to measurement of defined benefit pension plans through other comprehensive income |
| |
| ( |
| ( |
Income tax benefit (expense) relating to (losses) gains on financial assets measured irrevocably at fair value through other comprehensive income |
| ( |
| |
| ( |
Total income tax benefit (expense) relating to components of other comprehensive income that will be not reclassified to profit for the year |
| |
| |
| ( |
Income taxes relating to components of other comprehensive income that will be reclassified to profit for the year |
|
|
|
|
|
|
Income tax benefit (expense) related to (losses) gains on cash flow hedges |
| ( |
| |
| |
Total income tax benefit (expense) relating to components of other comprehensive income that will be reclassified to profit for the year |
| ( |
| |
| |
Total other comprehensive income |
| |
| ( |
| |
Total comprehensive income |
| |
| |
| |
Comprehensive income attributable to |
|
|
|
|
|
|
Comprehensive income attributable to owners of the parent |
| |
| |
| |
Comprehensive income attributable to non-controlling interest |
| |
| |
| |
| |
| |
| |
See note 19.
The accompanying notes form an integral part of these consolidated financial statements.
F-8
Consolidated Statements of Cash Flows
|
| For the period from January to December of the year | ||||||
Consolidated Statements of Cash Flows | Note N° |
| 2022 |
| 2021 |
| 2020 | |
|
| ThUS$ |
| ThUS$ |
| ThUS$ | ||
Cash flows generated from (used in) operating activities |
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| |||||
Classes of cash receipts generated from operating activities |
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Cash receipts from sales of goods and rendering of services |
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Cash receipts from premiums and benefits, annuities and other benefits from policies entered |
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Cash receipts derived from sub-leases |
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Classes of Payments |
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| |
Cash payments to suppliers for the provision of goods and services |
|
| ( |
| ( |
| ( | |
Cash payments relating to variable leases |
|
| ( |
| ( |
| ( | |
Other payments related to operating activities |
|
| ( |
| ( |
| ( | |
Net cash generated from operating activities |
|
| |
| |
| | |
Dividends received |
|
| |
| |
| | |
Interest paid |
|
| ( |
| ( |
| ( | |
Interest paid on lease liabilities |
|
| ( |
| ( |
| ( | |
Interest received |
|
| |
| |
| | |
Income taxes paid |
|
| ( |
| ( |
| ( | |
Other cash inflows (1) |
|
| |
| |
| | |
Net cash generated from operating activities |
|
| |
| |
| | |
Cash flows generated from (used in) investing activities |
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|
| |
Proceeds from the sale of equity instruments |
|
| |
| |
| | |
Cash flows arising from the loss/gain of control of subsidiaries and other businesses |
|
| — |
| |
| | |
Proceeds from the sale of property, plant and equipment |
|
| |
| |
| | |
Other payments to acquire interest in joint ventures |
|
| |
| |
| ( | |
Cash flows proceeds from the sale of interest in joint ventures |
|
| — |
| |
| | |
Acquisition of property, plant and equipment |
|
| ( |
| ( |
| ( | |
Proceeds from sales of intangible assets |
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| | |
Proceeds (payments) related to futures, forward options and swap contracts |
|
| |
| |
| ( | |
Purchases of intangible assets |
|
| — |
| |
| ( | |
Loans from / to related parties |
|
| |
| |
| ( | |
Purchase of other long-term assets |
|
| ( |
| ( |
| | |
Other cash (outflows) inflows (2) (3) |
|
| ( |
| ( |
| | |
Cash flow used in investing activities |
|
| ( |
| ( |
| ( |
(1) | Other inflows (outflows) of cash from operating activities include net increases (decreases) of value added tax, banking expenses, expenses associated with obtaining loans and taxes associated with interest payments. |
(2) | Other inflows (outflows) of cash include investments and redemptions of time deposits and other financial instruments that do not qualify as cash and cash equivalent in accordance with IAS 7, paragraph 7, since they mature in more than 90 days from the original investment date. |
(3) | Other inflows (outflows) of cash from investing activities include guarantees deposits described in note 12.2. |
The accompanying notes form an integral part of these consolidated financial statements.
F-9
Consolidated Statements of Cash Flows
|
| For the period from January to December of the year | ||||||
Consolidated Statements of Cash Flows | Note N° | 2022 | 2021 | 2020 | ||||
ThUS$ | ThUS$ | ThUS$ | ||||||
Cash flows generated from (used in) financing activities |
|
|
| |||||
Repayment of lease liabilities |
|
| ( | ( | ( | |||
Proceeds from long-term loans |
|
| | | | |||
Receipts from short-term loans | | — | — | |||||
Payment of borrowings |
|
| ( | ( | ( | |||
Payment of dividends |
|
| ( | ( | ( | |||
Capital stock increase |
|
| — | | — | |||
Net cash flow (used in) generated from financing activities |
|
| ( | | ( | |||
Net increase in cash and cash equivalents before the effect of changes in the exchange rate |
|
| | | ( | |||
Effects of exchange rate fluctuations on cash and cash equivalents |
|
| ( | ( | ( | |||
Increase in cash and cash equivalents |
|
| | | ( | |||
Cash and cash equivalents at beginning of year |
|
| | | | |||
Cash and cash equivalents at end of year |
| 9 | |
| |
| |
The accompanying notes form an integral part of these consolidated financial statements.
F-10
Consolidated Statements of Changes in Equity
Actuarial | ||||||||||||||||||||||||
Gains and | gains and | |||||||||||||||||||||||
Foreign | losses from | losses from | Accumulated | Equity | ||||||||||||||||||||
currency | financial | defined | other | Other | attributable | Non- | ||||||||||||||||||
Consolidated Statements of | translation | Hedge | assets | benefit plans | comprehensive | miscellaneous | Total | Retained | to owners of | controlling | ||||||||||||||
Changes in Equity | Share capital | reserves | reserves | reserve | reserve | income | reserves | reserves | earnings | the Parent | interests | Total Equity | ||||||||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
|
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ||
Equity at January 1, 2022 |
| |
| ( |
| ( |
| ( |
| ( |
| ( | |
| ( |
| |
| |
| |
| | |
Net profit |
| |
| |
| |
| |
| |
| — | |
| |
| |
| |
| |
| | |
Other comprehensive income |
| |
| ( |
| |
| |
| ( |
| | |
| |
| |
| |
| ( |
| | |
Comprehensive income |
| |
| ( |
| |
| |
| ( |
| | |
| |
| |
| |
| |
| | |
Dividends (1) |
| |
| |
| |
| |
| |
| — | |
| |
| ( |
| ( |
| ( |
| ( | |
Other (decreases) in equity |
| |
| |
| |
| |
| |
| — | ( |
| ( |
| |
| ( |
| |
| ( | |
Total changes in equity |
| |
| ( |
| |
| |
| ( |
| | ( |
| |
| |
| |
| |
| | |
Equity as of December 31, 2022 |
| |
| ( |
| ( |
| ( |
| ( |
| ( | |
| ( |
| |
| |
| |
| |
Actuarial | ||||||||||||||||||||||||
Gains and | gains and | |||||||||||||||||||||||
Foreign | losses from | losses from | Accumulated | Equity | ||||||||||||||||||||
currency | financial | defined | other | Other | attributable | Non- | ||||||||||||||||||
Consolidated Statements of | translation | Hedge | assets | benefit plans | comprehensive | miscellaneous | Total | Retained | to owners of | controlling | ||||||||||||||
Changes in Equity | Share capital | reserves | reserves | reserve | reserve | income | reserves | reserves | earnings | the Parent | interests | Total Equity | ||||||||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
|
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ||
Equity at January 1, 2021 |
| |
| ( |
| |
| |
| ( |
| ( | |
| |
| |
| |
| |
| | |
Net profit |
| |
| |
| |
| |
| |
| — | |
| |
| |
| |
| |
| | |
Other comprehensive income |
| |
| |
| ( |
| ( |
| |
| ( | |
| ( |
| |
| ( |
| |
| ( | |
Comprehensive income |
| |
| |
| ( |
| ( |
| |
| ( | |
| ( |
| |
| |
| |
| | |
Sale of equity instruments irrevocably recognized in OCI |
| |
| |
| |
| ( |
| |
| ( | |
| ( |
| |
| |
| |
| — | |
Dividends (1) |
| |
| |
| |
| |
| |
| — | |
| |
| ( |
| ( |
| ( |
| ( | |
Capital stock increase |
| |
| |
| |
| |
| |
| — | |
| |
| |
| |
| |
| | |
Other (decreases) in equity |
| |
| |
| |
| |
| |
| — | ( |
| ( |
| |
| ( |
| |
| ( | |
Total changes in equity |
| |
| |
| ( |
| ( |
| |
| ( | ( |
| ( |
| |
| |
| ( |
| | |
Equity as of December 31, 2021 |
| |
| ( |
| ( |
| ( |
| ( |
| ( | |
| ( |
| |
| |
| |
| |
|
|
|
|
| Actuarial |
|
|
|
|
|
| |||||||||||||
Gains and | gains and | |||||||||||||||||||||||
Foreign | losses from | losses from | Accumulated | Equity | ||||||||||||||||||||
currency | financial | defined | other | Other | attributable | Non- | ||||||||||||||||||
Consolidated Statements of | translation | Hedge | assets | benefit plans | comprehensive | miscellaneous | Total | Retained | to owners of | controlling | ||||||||||||||
Changes in Equity |
| Share capital |
| reserves |
| reserves |
| reserve |
| reserve |
| income | reserves |
| reserves |
| earnings |
| the Parent |
| interests |
| Total Equity | |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ |
| ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||
Equity at January 1, 2020 |
| |
| ( |
| |
| ( |
| ( |
| ( | |
| ( |
| |
| |
| |
| | |
Net profit |
| |
| |
| |
| |
| |
| — | |
| |
| |
| |
| |
| | |
Other comprehensive income |
| |
| |
| ( |
| |
| |
| | |
| |
| |
| |
| ( |
| | |
Comprehensive income |
| |
| |
| ( |
| |
| |
| | |
| |
| |
| |
| |
| | |
Dividends (1) |
| |
| |
| |
| |
| |
| — | |
| |
| ( |
| ( |
| ( |
| ( | |
Other (decrease) increases in equity |
| |
| |
| |
| |
| |
| — | |
| |
| |
| |
| ( |
| ( | |
Total changes in equity |
| |
| |
| ( |
| |
| |
| | |
| |
| |
| |
| ( |
| | |
Equity as of December 31, 2020 |
| |
| ( |
| |
| |
| ( |
| ( | |
| |
| |
| |
| |
| |
(1) | See Note 19.7 |
F-11
Glossary
The Following capitalized terms in these financial statements (including their notes) will have the following meaning:
“ADS’’ American Depositary Shares;
“Board” The Company’s Board of Directors;
“CAM’’ Arbitration and Mediation Center of the Santiago Chamber of Commerce;
“CCHEN’’ Chilean Nuclear Energy Commission;
“CCS’’ cross currency swap;
“CINIIF’’ International Financial Reporting Interpretations Committee;
“CMF’’ Financial Market Commission;
“Company” Sociedad Química y Minera de Chile S.A.;
“Corfo” Chilean Economic Development Agency;
“Corporate Governance Committee’’ The Company’s Corporate Governance Committee;
“Corporate Law’’ Law No. 18,046 on corporations;
“CPI” Consumer Price Index
“DCV’’ Central Securities Depository;
“DGA’’ General Directorate of Water Resources;
“Directors’ Committee” The Company’s Directors’ Committee;
“Dollar’’ or “US$’’ Dollars of the United States of America;
“DPA’’ Deferred Prosecution Agreement;
“FNE’’ Chilean National Economic Prosecutor’s Office;
“Health, Safety and Environment Committee’’ The Company’s Health, Safety and Environment Committee;
“IAS” International Accounting Standard;
“IASB’’ International Accounting Standards Board;
“IFRIC’’ International Financial Reporting Interpretations Committee;
“IFRS” International Financial Reporting Standard;
“ILO” International Labour Organization;
“IRS” interest rate swap;
F-12
“Lease Agreement’’ the mining concessions lease agreement signed by SQM Salar and Corfo in 1993, as subsequently amended;
“Management’’ the Company’s management;
“MUS$’’ millions of Dollars;
“Pampa Group’’ Jointly Sociedad de Inversiones Pampa Calichera S.A., Potasios de Chile S.A. and Inversiones Global Mining Chile Limitada;
“Pesos’’ or “Ch$” Chilean pesos, legal tender in Chile;
“PFIC’’ Passive foreign investment company;
“Project Agreement” project agreement for the Salar de Atacama signed by Corfo and SQM Salar in 1993, as subsequently amended;
“SEC’’ Securities and Exchange Commission;
“Securities Market Law” Securities Market Law No. 18,045;
“Sernageomin” Chilean National Geology and Mining Service;
“SIC’’ Standard Interpretations Committee;
“SII” Chilean Internal Revenue Service;
“SMA” Environmental Superintendent’s Office;
“SOFR” Secured overnight financing rate;
“SQM Group’’ The corporate group composed of the Company and its subsidiaries
“SQM Industrial” SQM Industrial S.A.;
“SQM NA” SQM North America Corporation;
“SQM Nitratos” SQM Nitratos S.A.;
“SQM Potasio” SQM Potasio S.A.;
“SQM Salar” SQM Salar S.A.;
“SSI’’ Staff severance indemnities;
“ThUS$’’ thousands of Dollars;
“Tianqi” Tianqi Lithium Corporation;
“UF” Unidad de Fomento (a Chilean Peso based inflation indexed currency unit);
“United States” United States of America;
“WHO” World Health Organization;
F-13
Note 1Identification and activities of the Company and Subsidiaries
1.1Historical background
Sociedad Química y Minera de Chile S.A. (the “Company” or “SQM”) is an open stock corporation organized under the laws of the Republic of Chile and its Chilean Tax Identification Number is 93.007.000-9.
The Company was incorporated through a public deed dated June 17, 1968 by the public notary of Santiago Mr. Sergio Rodríguez Garcés. Its existence was approved by Decree No. 1,164 of June 22, 1968 of the Ministry of Finance, and it was registered on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 No. 1,992. SQM’s headquarters are located at El Trovador 4285, Floor 6, Las Condes, Santiago, Chile, The Company’s telephone number is +(56 2) 2425-2000.
The Company is registered in the CMF under number 184 of March 18, 1983 and is therefore subject to oversight by that entity.
1.2Main domicile where the Company performs its production activities
The Company’s main domiciles are: Calle Dos Sur plot No. 5 - Antofagasta; Arturo Prat 1060 - Tocopilla; Administration Building w/n - Maria Elena; Administration Building w/n Pedro de Valdivia - María Elena, Anibal Pinto 3228 - Antofagasta, Kilometer 1378 Ruta 5 Norte Highway - Antofagasta, Coya Sur Plant w/n - Maria Elena, kilometer 1760 Ruta 5 Norte Highway - Pozo Almonte, Salar de Atacama (Atacama Saltpeter deposit) potassium chloride plant w/n - San Pedro de Atacama, potassium sulfate plant at Salar de Atacama w/n – San Pedro de Atacama, Minsal Mining Camp w/n CL Plant CL, Potassium– San Pedro de Atacama, formerly the Iris Saltpeter office w/n, Commune of Pozo Almonte, Iquique, Level 1 and 225 Dt Georges Tce Perth WA 6000, Australia.
1.3Codes of main activities
The codes of the main activities as established by the CMF, as follows:
● | 1700 (Mining) |
● | 2200 (Chemical products) |
● | 1300 (Investment) |
1.4Description of the nature of operations and main activities
The products of the Company are mainly derived from mineral deposits found in northern Chile where mining takes place and caliche and brine deposits are processed.
(a) | Specialty plant nutrition: Four main types of specialty plant nutrients are produced: potassium nitrate, sodium nitrate, sodium potassium nitrate and specialty blends. In addition, other specialty fertilizers are sold including third party products. |
(b) | Iodine: The Company produces iodine and iodine derivatives, which are used in a wide range of medical, pharmaceutical, agricultural and industrial applications, including x-ray contrast media, polarizing films for LCD and LED, antiseptics, biocides and disinfectants, in the synthesis of pharmaceuticals, electronics, pigments and dye components. |
(c) | Lithium: The Company produces lithium carbonate, which is used in a variety of applications, including electrochemical materials for batteries, frits for the ceramic and enamel industries, and it is an important ingredient in the manufacture of gunpowder, heat-resistant glass (ceramic glass), air conditioning chemicals, continuous casting powder for steel extrusion, primary aluminum smelting process, pharmaceuticals and lithium derivatives. We are also a leading supplier of lithium hydroxide, which is primarily used as an input for the lubricating greases industry and for certain cathodes for batteries. |
F-14
(d) | Industrial chemicals: The Company produces three industrial chemicals: sodium nitrate, potassium nitrate and potassium chloride. Sodium nitrate is used primarily in the production of glass, explosives, and metal treatment. Potassium nitrate is used in the manufacturing of specialty glass, and it is also an important raw material to produce of frits for the ceramics and enamel industries. Solar salts, a combination of potassium nitrate and sodium nitrate, are used as a thermal storage medium in concentrated solar power plants. Potassium chloride is a basic chemical used to produce potassium hydroxide, and it is also used oil drilling, and to produce carrageenan. |
(e) | Potassium: The Company produces potassium chloride and potassium sulfate from brines extracted from the Salar de Atacama. Potassium chloride is a commodity fertilizer used to fertilize a variety of crops including corn, rice, sugar, soybean and wheat. Potassium sulfate is a specialty fertilizer used mainly in crops such as vegetables, fruits and industrial crops. |
(f) | Other products and services: The Company also sells other fertilizers and blends, some of which we do not produce, mainly potassium nitrate, potassium sulfate and potassium chloride. This business line also includes revenue from commodities, services, interests, royalties and dividends. |
1.5Other background
(a) | Employees |
As of December 31, 2022, and 2021, the workforce was as follows:
As of December 31, 2022 | As of December 31, 2021 | |||||||||||
|
| Other |
|
|
| Other |
| |||||
Employees | SQM S.A. |
| subsidiaries | Total | SQM S.A. |
| subsidiaries | Total | ||||
Executives |
| |
| |
| |
| |
| |
| |
Professionals |
| |
| |
| |
| |
| |
| |
Technicians and operators |
| |
| |
| |
| |
| |
| |
Overall total |
| |
| |
| |
| |
| |
| |
As of December 31, 2022 | As of December 31, 2021 | |||||||||||
| Other |
|
|
| Other |
| ||||||
Place of work | SQM S.A. |
| subsidiaries | Total | SQM S.A. |
| subsidiaries | Total | ||||
In Chile |
| |
| |
| |
| |
| |
| |
Outside Chile |
|
| |
| |
|
| |
| | ||
Overall total |
| |
| |
| |
| |
| |
| |
(b)Main shareholders
As of December 31, 2022, there were
The following table shows information about the main shareholders of the Company’s Series A or Series B shares in circulation as of December 31, 2022 and 2021, in line with information provided by the DCV, with respect to each shareholder that, to our knowledge, owns more than
F-15
information is derived from our registry and reports managed by the DCV and informed to the CMF and the Chilean Stock Exchange:
|
| % of Series A |
|
| % of Series B |
| % of total |
| |||
Shareholders as of December 31, 2022 | No. of Series A | shares | No. of Series B | shares | shares |
| |||||
The Bank of New York Mellon, ADRs |
| |
| |
| |
| | % | | % |
Inversiones TLC SpA (1) |
| |
| | % | |
| |
| | % |
Sociedad de Inversiones Pampa Calichera S.A. (2) |
| |
| | % | |
| | % | | % |
Potasios de Chile S.A. |
| |
| | % | |
| |
| | % |
Banco de Chile via State Street |
| |
| | % | |
| | % | | % |
AF Habitad S.A. |
| |
| |
| |
| | % | | % |
Inv. Global Mining (Chile) Ltda. |
| |
| | % | |
| |
| | % |
Banco Santander via foreign investor accounts |
| |
| | % | |
| | % | | % |
AFP Cuprum S.A. |
| |
| | |
| | % | | % | |
Banco de Chile non-resident third party accounts |
| |
| | % | |
| | % | | % |
AF Capital S.A. |
| |
| | |
| | % | | % | |
AFP Provida S.A. |
| |
| |
| |
| | % | | % |
|
| % of Series A |
|
| % of Series B |
| % of total |
| |||
Shareholders as of December 31, 2021 | No. of Series A | shares | No. of Series B | shares | shares |
| |||||
Inversiones TLC SpA (1) |
| |
| | % | |
| |
| | % |
The Bank of New York Mellon, ADRs |
| |
| |
| |
| | % | | % |
Sociedad de Inversiones Pampa Calichera S.A. (2) |
| |
| | % | |
| | | % | |
Potasios de Chile S.A. |
| |
| | % | |
| |
| | % |
Inversiones Global Mining (Chile) Limitada |
| |
| | % | |
| |
| | % |
Banco de Chile via State Street |
| |
| | % | |
| | % | | % |
Banco Santander via foreign investor accounts |
| |
| |
| |
| | % | | % |
Banco de Chile non-resident third party accounts |
| |
| |
| |
| | % | | % |
Bando de Chile vi a Citi NA New York Clients |
| |
| | % | |
| | % | | % |
Inversiones la Esperanza de Chile Limitada |
| |
| | % | |
| | | % | |
Larraín Vial S.A. Corredora de Bolsa |
| |
| | % | |
| | % | | % |
AFP Habitat S.A. for Pension Fund C |
| | | |
| | % | | % |
(1) | As reported by DCV, which records the Company’s shareholders’ register as of December 31, 2022 and 2021 Inversiones TLC SpA, a subsidiary wholly owned by Tianqi Lithium Corporation, is the direct owner of |
(2) | As of December 31, 2021, Sociedad de Inversiones Pampa Calichera S.A. has |
1.6Capital stock increase
On April 28, 2021, the Company completed a US$
F-16
preemptive rights offerings. The remaining
As of April 28, 2021, contributed capital is US$
Note 2Basis of presentation for the consolidated financial statements
2.1Accounting period
These consolidated financial statements cover the following periods:
(a) | Consolidated Statements of Financial Position as of December 31, 2022 and 2021. |
(b) | Consolidated Statements of Income from January 1 to December 31, 2022, 2021 and 2020. |
(c) | Consolidated Statements of Comprehensive Income from January 1 to December 31, 2022, 2021 and 2020. |
(d) | Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020. |
(e) | Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020. |
2.2Consolidated financial statements
The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with IFRS as issued by the IASB and they represent the full, explicit and unreserved adoption of IFRS.
These consolidated financial statements fairly present the Company’s financial position, as of December 31, 2022 and 2021, the comprehensive results of operations, changes in equity and cash flows occurring for the three years ended December 31, 2022, 2021 and 2020.
IFRS establish certain alternatives for their application, those applied by the Company are detailed in this Note and Note 3.
The accounting policies used in the preparation of these consolidated financial statements comply with each IFRS in force at their date of presentation.
2.2.1 Revision of previously issued financial statements
(a) | The Company has revised its consolidated statement of financial position as of December 31, 2021 to correct the presentation of deferred tax assets and liabilities as follows(see Note 25.3). |
Original balances | Balances | |||||
| reported as of |
| Reclassification |
| reclassified as of | |
Items | December 31, 2021 | December 31, 2021 | ||||
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Deferred tax assets |
| — |
| |
| |
Deferred tax liabilities |
| |
| |
| |
This revision is not considered material to the previously issued financial statements.
(b) | The Company identified an error in the presentation of the earnings per share information in the Consolidated Statements of Income for the years ended December 31, 2021 and 2020 whereby the 2020 basic and diluted earnings per share amounts were incorrectly presented in the 2021 column, the 2019 basic and diluted earnings per share amounts were incorrectly presented in the 2020 column, and the 2021 basic and diluted earnings per share amounts were inadvertently omitted. The Company assessed the materiality of the error on the previously |
F-17
issued consolidated financial statements and concluded that the error was not material to the previously issued financial statements. The impact of the revision of the previously issued financial statements is as follows: |
Original earnings per share | Corrected earnings per share | |||
| reported for the year ended |
| reported for the year ended | |
Items | December 31, 2021 | December 31, 2021 | ||
US$ |
| US$ | ||
Basic | ||||
Diluted |
Original earnings per share | Corrected earnings per share | |||
| reported for the year ended |
| reported for the year ended | |
Items | December 31, 2020 | December 31, 2020 | ||
US$ |
| US$ | ||
Basic | ||||
Diluted |
2.3Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following:
(a) | Inventories are recorded at the lower of cost and net realizable value. |
(b) | Financial derivatives measured at fair value. |
(c) | Certain financial investments measured at fair value with an offsetting entry in other comprehensive income. |
F-18
2.4Accounting pronouncements
New accounting pronouncements
(a) | The following standards, interpretations and amendments are mandatory for the first time for annual periods beginning on January 1, 2022: |
|
| Mandatory for annual periods | ||
Amendments and improvements |
| Description | beginning on or after | |
Reference the Conceptual Framework, amendments to IFRS 3 |
| Minor changes were made to the IFRS 3 “Business Combinations” to update the references to the conceptual framework for financial reporting without changing the requirements for business combinations. |
| 01-01-2022 |
Amendment to IAS 16, "Property, Plant and Equipment." |
| Prohibits a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and related cost in profit or loss. |
| 01-01-2022 |
Amendment to IAS 37, "Provisions, Contingent Liabilities and Contingent Assets". | Clarifies for onerous contracts what unavoidable costs a company must include to evaluate whether a contract generates losses. | 01-01-2022 | ||
Annual Improvements to IFRS Standards 2018-2020 The following improvements were finalized in May 2020: | ||||
IFRS 9 Financial Instruments. | Clarifies what fees must be included in the "10 percent" test when evaluating whether to derecognize a financial liability | 01-01-2022 | ||
IFRS 16 Leases | The amendment to illustrative example 13 removes the illustration of the reimbursement of improvements to the leased asset made by the lessor to resolve any potential confusion in the treatment of lease incentives. | 01-01-2022 |
Management determined that the adoption of the aforementioned standards, amendments and interpretations did not significantly impact the company’s consolidated financial statements.
F-19
(b) | Standards, interpretations and amendments issued that had not become effective for financial statements beginning on January 1, 2022 and which the Company has not adopted early are as follows: |
Mandatory for annual periods | ||||
Standards and Interpretations |
| Description |
| beginning on or after |
Amendment to IAS 1 “Presentation of financial statements” on classification of liabilities. | These amendments clarify that the liabilities will be classified as current or non-current depending on the rights that exist at the close of the reporting period. The classification is not affected by the expectations of the entity or the events subsequent to the report date (for example, the receipt of a waiver or noncompliance with the pact). The amendment also clarifies what IAS 1 means when referring to “liquidation” of a liability. The amendment must be applied retroactively in accordance with IAS 8. Effective date of application January 1, 2022; however, such date was deferred to January 1, 2024. | 01-01-2024 | ||
Amendment to IAS 1 “Non-current liabilities with covenants”. | The amendment is aimed at improving the information that an entity provides when the payment terms of its liabilities can be deferred depending on compliance with covenants within the twelve months following the date of issue of the financial statements. | 01-01-2024 | ||
Amendments to IFRS 16 “Leases” | On sales with leaseback, which explains how an entity should recognize the rights to use the asset and how the profits or losses from the sale and leaseback should be recognized in the financial statements. | 01-01-2024 | ||
Amendments to IAS 1: “Presentation of the Financial Statements” and IAS 8 “Accounting policies, changes in accounting estimates and errors”. | The amendments are intended to improve disclosures of accounting policies and to help users of financial statements distinguish between changes in accounting estimates and changes in accounting policies. | 01-01-2023 | ||
Amendment to IAS 12 - Deferred taxes related to assets and liabilities that arise from a single transaction. | These amendments require companies to recognize deferred taxes on transactions that result in equal amounts in taxable and deductible temporary differences in the initial recognition. | 01-01-2023 | ||
Amendment to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures”, Published in September 2014. | These amendments address an inconsistency between the requirements in IFRS 10 and those in IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business -whether it is housed in a subsidiary or not. A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. | undetermined |
Management believes that the adoption of the above standards, amendments and interpretations will not have a significant impact on the Company’s financial statements.
2.5Basis of consolidation
(a) | Subsidiaries |
The Company established control as the basis of consolidation of its financial statements. The Company controls a subsidiary when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.
The consolidation of a subsidiary starts when the Group controls it and it is no longer included in the consolidation when this control is lost.
Subsidiaries are consolidated through a line by line method, adding items that represent assets, liabilities, income and expenses with a similar content, and eliminating operations between companies within the SQM Group.
F-20
Results for dependent companies acquired or disposed of during the period are included in the consolidated accounts from the date on which control is transferred to the SQM Group or until the date when this control ends, as relevant.
To account for an acquisition of a business, the Company uses the acquisition method. Under this method, the acquisition cost is the fair value of assets delivered, equity securities issued, and incurred or assumed liabilities at the date of exchange. Assets, liabilities and contingencies identifiable assumed in a business combination are measured initially at fair value at the acquisition date. For each business combination, the Company will measure the non-controlling interest of the acquiree either at fair value or as proportional share of net identifiable assets of the acquire.
The following tables lists the principal subsidiaries controlled by the Group as of December 31,2022:
|
|
| Country of |
| Functional | Ownership Interest | ||||||||
Subsidiaries | TAX ID No. | Address | Incorporation |
| Currency | Direct | Indirect | Total | ||||||
SQM Nitratos S.A. |
| 96.592.190-7 |
| El Trovador 4285, Las Condes |
| Chile | Dollar | |||||||
SQM Potasio S.A. |
| 96.651.060-9 |
| El Trovador 4285, Las Condes |
| Chile | Dollar | |||||||
Serv. Integrales de Tránsito y Transf. S.A. | 79.770.780-5 | Arturo Prat 1060, Tocopilla | Chile | Dollar | ||||||||||
Isapre Norte Grande Ltda. | 79.906.120-1 | Aníbal Pinto 3228, Antofagasta | Chile | Peso | ||||||||||
Ajay SQM Chile S.A. | 96.592.180-K | Av. Pdte. Eduardo Frei 4900, Santiago | Chile | Dollar | - | |||||||||
Almacenes y Depósitos Ltda. | 79.876.080-7 | El Trovador 4285, Las Condes | Chile | Peso | ||||||||||
SQM Salar S.A. | 79.626.800-K | El Trovador 4285, Las Condes | Chile | Dollar | ||||||||||
SQM Industrial S.A. | 79.947.100-0 | El Trovador 4285, Las Condes | Chile | Dollar | ||||||||||
Exploraciones Mineras S.A. | 76.425.380-9 | El Trovador 4285, Las Condes | Chile | Dollar | ||||||||||
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. | 76.534.490-5 | Aníbal Pinto 3228, Antofagasta | Chile | Peso | - | |||||||||
Soquimich Comercial S.A. | 79.768.170-9 | El Trovador 4285, Las Condes | Chile | Dollar | - | |||||||||
Comercial Agrorama Ltda. (1) | 76.064.419-6 | El Trovador 4285, Las Condes | Chile | Dollar | - | |||||||||
Comercial Hydro S.A. | 96.801.610-5 | El Trovador 4285, Las Condes | Chile | Dollar | - | |||||||||
Agrorama S.A. | 76.145.229-0 | El Trovador 4285, Las Condes | Chile | Dollar | - | |||||||||
Orcoma Estudios SPA | 76.359.919-1 | Apoquindo 3721 OF 131, Las Condes | Chile | Dollar | - | |||||||||
Orcoma SPA | 76.360.575-2 | Apoquindo 3721 OF 131, Las Condes | Chile | Dollar | - | |||||||||
SQM MaG SpA | 76.686.311-9 | Los Militares 4290, Las Condes | Chile | Dollar | - | |||||||||
Sociedad Contractual Minera Búfalo | 77.114.779-8 | Los Militares 4290, Las Condes | Chile | Dollar | ||||||||||
SQM North America Corp. | Foreign | 2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA | United States of America | Dollar | ||||||||||
RS Agro Chemical Trading Corporation A.V.V. | Foreign | Caya Ernesto O. Petronia 17, Orangestad | Aruba | Dollar | ||||||||||
Nitratos Naturais do Chile Ltda. | Foreign | Al. Tocantis 75, 6° Andar, Conunto 608 Edif. West Gate, Alphaville Barureri, CEP 06455-020, Sao Paulo | Brazil | Dollar | - | |||||||||
SQM Corporation N.V. | Foreign | Pietermaai 123, P.O. Box 897, Willemstad, Curacao | Curacao | Dollar | ||||||||||
SQM Perú S.A. (2) | Foreign | Avenida Camino Real N° 348 of. 702, San Isidro, Lima | Perú | Dollar | ||||||||||
SQM Ecuador S.A. | Foreign | Av. José Orrantia y Av. Juan Tanca Marengo Edificio Executive Center Piso 2 Oficina 211 | Ecuador | Dollar | ||||||||||
SQM Brasil Ltda. | Foreign | Al. Tocantis 75, 6° Andar, Conunto 608 Edif. West Gate, Alphaville Barureri, CEP 06455-020, Sao Paulo | Brazil | Dollar | ||||||||||
SQMC Holding Corporation. | Foreign | 2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta | United States of America | Dollar | ||||||||||
SQM Japan Co. Ltd. | Foreign | From 1st Bldg 207, 5-3-10 Minami- Aoyama, Minato-ku, Tokio | Japan | Dollar |
(1) | has control over the administration of Comercial Agrorama Ltda. |
(2) | SQM Perú has been liquidated as of December 31, 2022. |
F-21
|
|
| Country of |
| Functional | Ownership Interest | ||||||||
Subsidiaries | TAX ID No. | Address | Incorporation |
| Currency | Direct | Indirect | Total | ||||||
SQM Europe N.V. |
| Foreign |
| Houtdok-Noordkaai 25a B-2030 Amberes |
| Belgium | Dollar | |||||||
SQM Indonesia S.A. |
| Foreign |
| Perumahan Bumi Dirgantara Permai, Jl Suryadarma Blok Aw No 15 Rt 01/09 17436 Jatisari Pondok Gede |
| Indonesia | Dollar | - | ||||||
North American Trading Company | Foreign | 2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA | United States of America | Dollar | - | |||||||||
SQM Virginia LLC | Foreign | 2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA | United States of America | Dollar | - | |||||||||
SQM Comercial de México S.A. de C.V. | Foreign | Av. Moctezuma 144-4 Ciudad del Sol. CP 45050, Zapopan, Jalisco México | México | Dollar | ||||||||||
SQM Investment Corporation N.V. | Foreign | Pietermaai 123, P.O. Box 897, Willemstad, Curacao | Curacao | Dollar | ||||||||||
Royal Seed Trading Corporation A.V.V. | Foreign | Caya Ernesto O. Petronia 17, Orangestad | Aruba | Dollar | ||||||||||
SQM Lithium Specialties Limited Partnership | Foreign | 2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA | United States of America | Dollar | - | |||||||||
Comercial Caimán Internacional S.A. | Foreign | Edificio Plaza Bancomer | Panamá | Dollar | - | |||||||||
SQM France S.A. | Foreign | ZAC des Pommiers 27930 FAUVILLE | France | Dollar | - | |||||||||
Administración y Servicios Santiago S.A. de C.V. | Foreign | Av. Moctezuma 144-4 Ciudad del Sol, CP 45050, Zapopan, Jalisco México | México | Dollar | - | |||||||||
SQM Nitratos México S.A. de C.V. | Foreign | Av. Moctezuma 144-4 Ciudad del Sol, CP 45050, Zapopan, Jalisco México | México | Dollar | - | |||||||||
Soquimich European Holding B.V. | Foreign | Luna Arena, Herikerbergweg 238 1101 CM Amsterdan | Holland | Dollar | - | |||||||||
SQM Iberian S.A. | Foreign | Provenza 251 Principal 1a CP 08008, Barcelona | Spain | Dollar | - | |||||||||
SQM África Pty Ltd. | Foreign | Tramore House, 3 Wterford Office Park, Waterford Drive, 2191 Fourways, Johannesburg | South Africa | Dollar | - | |||||||||
SQM Oceanía Pty Ltd. | Foreign | Level 9, 50 Park Street, Sydney NSW 2000, Sydney | Australia | Dollar | - | |||||||||
SQM Beijing Commercial Co. Ltd. | Foreign | Room 1001C, CBD International Mansion N 16 Yong An Dong Li, Jian Wai Ave Beijing 100022, P.R. | China | Dollar | - | |||||||||
SQM Thailand Limited | Foreign | Unit 2962, Level 29, N° 388, Exchange Tower Sukhumvit Road, Klongtoey Bangkok | Thailand | Dollar | - | |||||||||
SQM Colombia SAS | Foreign | Cra 7 No 32 – 33 piso 29 Pbx: (571) 3384904 Fax: (571) 3384905 Bogotá D.C. – Colombia. | Colombia | Dollar | - | |||||||||
SQM Australia PTY | Foreign | Level 16, 201 Elizabeth Street Sydney | Australia | Dollar | - | |||||||||
SQM International N.V. | Foreign | Houtdok-Noordkaai 25a B-2030 Amberes | Belgium | Dollar | ||||||||||
SQM (Shanghai) Chemicals Co. Ltd. | Foreign | Room 4703-33, 47F, No.300 Middle Huaihai Road, Huangpu district, Shanghai | China | Dollar | - | |||||||||
SQM Korea LLC | Foreign | Suite 22, Kyobo Building, 15th Floor, 1 Jongno Jongno-gu, Seoul, 03154 South Korea | Korea | Dollar | - | |||||||||
SQM Holland B.V. | Foreign | Herikerbergweg 238, 1101 CM Amsterdam Zuidoost | Holland | Dollar | - |
2.6Investments in associates and joint ventures
Investments in joint arrangements are classified as joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.
(a) | Joint operations |
The Company recognizes its direct right to the assets, liabilities, income and expenses of the joint arrangement.
(b) | Joint ventures and investments in associates |
Interests in companies over which joint control is exercised (joint ventures) or where an entity has significant influence (associates) are recognized using the equity accounting method. Significant influence is presumed when the investor owns over 20% of the investee’s share capital. The investment is recognized using this method in the statement of financial position at cost plus changes subsequent to acquisition and includes the proportional share of the associate’s equity. For these purposes, the percentage interest in the associate is used. The associated acquired goodwill is included in the investee’s book value and is not amortized. The debit or credit to the income statement reflects the proportional share of the profit or loss of the associate.
Unrealized gains from transactions with joint ventures or associates are eliminated in accordance with the Company’s percentage interest in such entities. Any unrealized losses are also eliminated, unless that transaction provides evidence that the transferred asset is impaired.
Changes in associate’s or joint ventures equity are recognized proportionally with a charge or credit to "Other Reserves" and are classified according to their origin. The reporting dates of the associate or joint ventures, the Company and related policies are similar for equivalent transactions and events in similar circumstances. In the event that significant influence is lost, or the investment is sold, or held for sale, the equity method is suspended, not recognizing the proportional share of the gain or loss. If the resulting value under the equity method is negative, the share of profit or loss is reflected as zero in the consolidated financial statements, unless there is a commitment by the Company to restore the capital position of the Company, in which case the related risk provision and expense are recorded.
F-22
Dividends received by these companies are recorded by reducing the value of the investment and are shown in cash flows from operating activities, and the proportional share of the gain or loss recognized in accordance with the equity method is included in the consolidated income statement under "Share of Gains (Losses) of Associates and Joint Ventures Accounted for Using the Equity Method’’.
Note 3Significant accounting policies
3.1 | Classification of balances as current and non-current |
In the consolidated statement of financial position, balances are classified in consideration of their recovery (maturity) dates; i.e., those maturing within a period equal to or less than 12 months are classified as current counted from the closing date of the consolidated financial statements and those with maturity dates exceeding the aforementioned period are classified as non-current.
The exception to the foregoing relates to deferred taxes, which are classified as non-current, regardless of the maturity they have.
3.2 | Functional and presentation currency |
The Company’s consolidated financial statements are presented in United States dollars, without decimal places, which is the Company’s functional and presentation currency and is the currency of the main economic environment in which it operates. Consequently, the term foreign currency is defined as any currency other than the U.S. dollar.
3.3 | Accounting policy for foreign currency translation |
(a) | SQM group entities: |
The revenue, expenses, assets and liabilities of all entities that have a functional currency other than the presentation currency are converted to the presentation currency as follows:
- | Assets and liabilities are converted at the closing exchange rate prevailing on the reporting date. |
- | Revenues and expenses of each profit or loss account are converted at monthly average exchange rates. |
- | All resulting foreign currency translation gains and losses are recognized as a separate component in translation reserves. |
In consolidation, foreign currency differences arising from the translation of a net investment in foreign entities are recorded in shareholder’s equity (“foreign currency translation reserve”). At the date of disposal, such foreign currency translation differences are recognized in the statement of income as part of the gain or loss from the sale.
F-23
The main exchange rates and UF used to translate monetary assets and liabilities, expressed in foreign currency at the end and average of each period in respect to U.S. dollars, are as follows:
|
| |||||||
Closing exchange rates | Average exchange rates | |||||||
As of | As of | As of | As of | |||||
December 31, | December 31, | December 31, | December 31, | |||||
Currencies |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Brazilian real |
| |
| |
| |
| |
New Peruvian sol |
| |
| |
| |
| |
Japanese yen |
| |
| |
| |
| |
Euro |
| |
| |
| |
| |
Mexican peso |
| |
| |
| |
| |
Australian dollar |
| |
| |
| |
| |
Pound Sterling |
| |
| |
| |
| |
South African rand |
| |
| |
| |
| |
Chilean peso |
| |
| |
| |
| |
Chinese yuan |
| |
| |
| |
| |
Indian rupee |
| |
| |
| |
| |
Thai Baht |
| |
| |
| |
| |
Turkish lira |
| |
| |
| |
| |
Korean Won | | | | | ||||
Indonesian Rupiah | | | | | ||||
United Arab Emirates dirham | | | | | ||||
Polish Zloty | | | | | ||||
UF (*) |
| |
| |
| |
| |
(*) | US$ per UF |
(b) | Transactions and balances |
The Company’s non-monetary transactions in currencies other than the functional currency (Dollar) are translated to the respective functional currencies of Group entities at the exchange rate on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. All differences are recorded in the statement of income except for all monetary items that provide an effective hedge for a net investment in a foreign operation. These items are recognized in other comprehensive income until disposal of the investment, when they are recognized in the statement of income. Charges and credits attributable to foreign currency translation differences on those hedge monetary items are also recognized in other comprehensive income.
Non-monetary assets and liabilities that are measured at historical cost in a foreign currency are retranslated to the functional currency at the historical exchange rate of the transaction. Non-monetary items that are measured based on fair value in a foreign currency are translated using the exchange rate at the date on which the fair value is determined.
3.4Consolidated statement of cash flows
Cash equivalents correspond to highly liquid short-term investments that are easily convertible into known amounts of cash and subject to insignificant risk of changes in their value and mature in less than three months from the date of acquisition of the instrument.
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash and cash equivalents as defined above.
The statement of cash flows present cash transactions performed during the period, determined using the direct method.
F-24
3.5Financial assets
Management determines the classification of its financial assets at fair value (either through other comprehensive income, or through profit or loss), and at amortized cost. The classification depends on the business model of the entity to manage the financial assets and the contractual terms of the cash flows.
The initial value of the Company's financial assets valued at fair value through comprehensive income includes the transaction costs that are directly attributable to acquiring that financial asset on the date the Company commits to acquiring it, whereas the transaction costs for financial assets valued at fair value through profit or loss are expensed. The initial value of trade and other receivables that do not include a significant financial component is their transaction price.
After initial recognition, the Company measures its financial assets according to the Company’s business model for managing its financial assets and the contractual terms of its cash flows:
(a) | Financial debt instruments measured at amortized cost. Financial assets that meet the following conditions are included in this category (i) the business model that supports it aims to maintain the financial assets to obtain the contractual cash flows and the contractual conditions of the financial asset give place, on specified dates, to cash flows that are only payments of the principal and interest on the outstanding principal amount. The Company’s financial assets that meet these conditions are: (ii) cash equivalents; (iii) related party receivables; (iv) trade debtors; (v) other receivables. |
(b) | Financial instruments at fair value. A financial asset should be measured at fair value through profit or loss or fair value through other comprehensive income, depending on the following: |
(i) | "Fair Value Through Other Comprehensive Income": Assets held to collect contractual cash flows and to be sold, where the asset cash flows are only capital and interest payments, are measured at fair value through other comprehensive income. Changes in book values are through other comprehensive income, except for the recognition of impairment losses, interest income and exchange gains and losses, which are recognized in the income statement. When a financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to the income statement. Interest income from these financial assets is included in financial income using the effective interest method. |
(ii) | "Fair Value Through Profit and Loss": Assets that do not meet the amortized cost or "Fair Value Through Other Comprehensive Income" criteria are valued at "Fair Value Through Profit and Loss". |
(c) | Financial equity instruments at fair value through other comprehensive income. Equity instruments that are not classified as held for trading and which the Group has irrevocably chosen to recognize in this category. Amounts presented in other comprehensive income will not be subsequently transferred to profit or loss. |
3.6Financial assets impairment
The Company evaluates expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income. The impairment method used depends on whether there has been a significant increase in credit risk.
The Company applies simplified approach to measure expected credit losses using the lifetime expected loss on all trade receivables. Expected credit losses are measured by grouping receivables by their shared credit risk characteristics and days overdue.
The Company has concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for contract assets. Expected loss rates are based on sales payment profiles and historical credit losses within this period. Historical loss rates are adjusted to reflect current expectations and information regarding macroeconomic factors that affect the ability of customers to meet their commitments.
F-25
Impairment losses from receivables and contract assets are shown as net impairment losses in the line “Impairment of financial assets and reversal of impairment losses,” see Note 21.7. The subsequent recovery of previously canceled amounts are credited to the same line.
3.7Financial liabilities
Management accounts for its financial liabilities at amortized cost.
Upon initial recognition, the Company measures its financial liabilities by their fair value less the transaction costs that are directly attributable to the acquisition of the financial liability. The Company subsequently measures its financial liabilities at amortized cost.
Financial liabilities measured at amortized cost are commercial accounts payable and other accounts payable and other financial liabilities.
Amortized cost is based using the effective interest rate method. Amortized cost is calculated by considering any premium or discount on the acquisition and includes transaction costs that are an integral part of the effective interest rate.
3.8Estimated fair value of financial instruments
The fair value of financial assets and liabilities is estimated using the following information. Although the data represent Management's best estimates, it is subjective and involves significant estimates regarding current economic conditions, market conditions and risk characteristics.
Methodologies and assumptions used depend on the risk terms and characteristics of instruments and include the following as a summary:
Fair value estimation
Financial assets and liabilities measured at fair value consist of forwards hedging the mismatch in the balance sheet and cash flows, options hedging the mismatch in the balance sheet and cross currency swaps to hedge bonds issued in local currency (Peso/UF).
The fair value of the Company’s assets and liabilities recognized by cross currency swaps contracts is calculated as the difference between the present value of discounted cash flows of the asset (Peso/UF) and liability (Dollar) parts of the derivative. In the case of the IRS, the asset value recognized is calculated as the difference between the discounted cash flows of the asset (variable rate) and liability (fixed rate) parts of the derivative. Forwards are calculated as the difference between the strike price of the contract and the spot price plus the forwards points at the date of the contract. Financial options: the value recognized is calculated using the Black-Scholes method.
In the case of CCS, the entry data used for the valuation models are UF, Peso, Dollar and basis swap rates. In the case of fair value calculations for interest rate swaps, the Forward Rate Agreement rate and ICVS 23 Curve (Bloomberg: cash/deposits rates, futures, swaps). In the case of forwards, the forwards curve for the currency in question is used. Finally, for options, the spot price, risk-free rate and volatility of exchange rate are used, all in accordance with the currencies used in each valuation. The financial information used as entry data for the Company’s valuation models is obtained from Bloomberg, the well-known financial software company. Conversely, the fair value provided by the counterparties of derivatives contracts is used only as a control and not for valuation.
The effects on profit or loss of movements in these amounts is recognized in the caption finance costs, foreign currency translation gain (loss) or cash flow hedge reserve in the statement of comprehensive income, depending on each particular case.
Estimate of fair value for disclosure purposes
● | Cash equivalent approximates fair value due to the short-term maturities of these instruments. |
F-26
● | The fair value of current trade receivables is considered to be equal to the carrying amount due to the maturity of such accounts at short-term. |
● | Payables, current lease liabilities and other current financial liabilities are considered fair value equal to book value due to the short-term maturity of these accounts. |
● | The fair value of the debt (long-term secured and unsecured debentures; bonds denominated in local currency (Peso/UF) and foreign currency (Dollar), borrowings denominated in foreign currency (Dollar) and lease liabilities of the Company are calculated at current value of cash flows subtracted from market rates upon valuation, considering the terms of maturity and exchange rates. The UF and Peso rate curves are used as inputs for the valuation model. This information is obtained through from the renowned financial software company, Bloomberg, and the Chilean Association of Banks and Financial Institutions |
3.9Reclassification of financial instruments
When the Company changes its business model for managing financial assets, it will reclassify all its financial assets affected by the new business model. Financial liabilities cannot be reclassified.
3.10Financial instruments derecognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred; and the control of the financial assets has not been retained.
The Company derecognizes a financial liability when its contractual obligations or a part of these are discharged, paid to the creditor or legally extinguished from the principle responsibility contained in the liability.
3.11Derivative and hedging financial instruments
The financial instruments derivatives are recognized initially at fair value as of the date on which the derivatives contract is signed and, they are subsequently assessed at fair value. The method for recognizing the resulting gain or loss depends on whether the derivative has been designated as an accounting hedge instrument and, if so, it depends on the type of hedging, which may be as follows:
a) | Fair value hedge of assets and liabilities recognized (fair value hedges). |
b) | Hedging of a single risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge). |
At the beginning of the transaction, the Company documents the relationship that exists between hedging instruments and those items hedged, as well as their objectives for risk management purposes and the strategy to conduct different hedging operations.
The Company also documents its evaluation both at the beginning and at the end of each period if the derivatives used in hedging transactions are highly effective to offset changes in the fair value or in cash flows of hedged items.
The fair value of derivative instruments used for hedging purposes is shown in Note 12.3.
Derivatives that are not designated or do not qualify as hedging derivatives are classified as current assets or liabilities, and changes in the fair value are directly recognized through profit or loss.
a) | Fair value hedge |
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective portion of interest rate swaps that hedge fixed rate borrowings is recognized in profit or loss within finance costs, together with changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the ineffective portion is recognized in profit or loss within other income or other expenses. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged
F-27
item for which the effective interest method is used is amortized to profit or loss over the period to maturity using a recalculated effective interest rate.
The effective portion of the gain or loss on the hedging instrument is initially recognized with a debit or credit to other comprehensive income, while any ineffective portion is immediately recognized to income, as appropriate, depending on the nature of the hedged risk. The amounts accumulated in other comprehensive income are carried over to results when the hedged items are settled or when these have an impact on income.
When a hedging instrument no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until the forecast transaction occurs.
When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in other comprehensive income are immediately reclassified to profit or loss.
3.12Derivative financial instruments not considered as hedges
Derivative financial instruments not considered as hedges are recognized at fair value with the effect in the profit of the year. The Company has derivative financial instruments to hedge foreign currency risk exposure.
The Company continually evaluates the existence of embedded derivatives in both its contracts and in its financial instruments. As of December 31, 2022, and 2021, the Company does not have any embedded derivatives.
3.13Deferred acquisition cost from insurance contracts
Acquisition costs from insurance contracts are classified as prepayments and correspond to insurance contracts in force, recognized using the straight-line method and on an accrual basis independent of payment date. These are recognized under other non-financial assets current.
3.14 Leases
(a) | Right-of-use assets |
The Company recognizes right-of-use assets on the initial lease date (i.e., the date on which the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, adjusted by any new measurement of the lease liability. The cost of right-of-use assets includes the amount of recognized lease liabilities, direct initial costs incurred and lease payments made on the start date or sooner, less the lease incentives received. Unless the Company is reasonably sure it will take ownership of the leased asset at the end of the lease period, the assets recognized through right-of-use are depreciated in a straight line during the shortest period of their estimated useful life and lease period. Right-of-use assets are subject to impairment.
(b) | Lease liabilities |
On the lease start date, the Company recognizes lease liabilities measured at present value of lease payments that will be made during the lease period. Lease payments include fixed payments (including payments that are essentially fixed), less incentives for lease receivables, variable lease payments that are dependent on an index or rate and amounts that are expected to be paid as guaranteed residual value. Lease payments also include the exercise price of a purchase option if the Company is reasonably sure it will exercise this and penalty payments for terminating a lease, if the lease period reflects that the Company will exercise the option to terminate. Variable lease payments that are not dependent on an index or rate are recognized as expenses in the period that produces the event or condition that triggers payment.
When calculating the present value of lease payments, the Company uses the incremental borrowing rate on the initial lease date if the interest rate implicit in the lease cannot be determined easily. After the start date, the lease liability balance will increase to reflect the accumulation of interest and will diminish as lease payments are made. Furthermore, the book value of lease liabilities is remeasured in the event of an amendment, a change in the lease period, a change in the fixed lease payments in substance or a change in the assessment to buy the underlying asset.
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Payments made that affect lease liabilities are presented as part of the financing activities in the cash flow statement.
(c) | Short-term leases and low-value asset leases |
The Company applies the short-term lease recognition exemption to leases with a lease term of 12 months or less starting on the start date and that don’t have a purchase option. It also applies the low-value asset lease recognition exemptions to leases less than the limit specified in the respective accounting standard. Lease payments in short-term leases and low-value asset leases are recognized as lineal expenses during the lease term.
(d) | Significant judgments in the determination of the lease term for contracts with renewal options. |
The Company determines the lease term as the non-cancellable period of the lease, together with periods covered by an option to extend the lease if it is reasonably certain that this will be exercised, or any period covered by an option to terminate the lease, if it is reasonably certain that this will not be exercised.
The Company has the option, under some of its leases, to lease assets for additional terms. The Company applies its judgment when assessing whether it is reasonably certain that it will exercise the option to renovate. In other words, it considers all the relevant factors that create an economic incentive for it to exercise the option to renovate. After the start date, the Company reevaluates the lease term if there is a significant event or change in the circumstances that are under its control and affect its capacity to exercise (or not exercise) the option to renovate.
3.15Inventory measurement
The method used to determine the cost of inventories is the weighted average monthly cost of warehouse storage. In determining production costs for own products, the company includes the costs of labor, raw materials, materials and supplies used in production, depreciation and maintenance of the goods that participate in the production process, the costs of product movement necessary to maintain stock on location and in the condition in which they are found, and also includes the indirect costs of each task such as laboratories, process and planning areas, and personnel expenses related to production, among others.
For finished and in-process products, the company has four types of provisions, which are reviewed quarterly:
(a) | Provision associated with the lower value of stock: The provision is directly identified with the product that generates it and involves three types: (i) provision of lower realizable value, which corresponds to the difference between the inventory cost of intermediary or finished products, and the sale price minus the necessary costs to bring them to the same conditions and location as the product with which they are compared; (ii) provision for future uncertain use that corresponds to the value of those products in process that are likely not going to be used in sales based on the company’s long-term plans; (iii) reprocessing costs of products that are unfeasible for sale due to current specifications. |
(b) | Provision associated with physical differences in inventory: A provision is made for differences that exceed the tolerance considered in the respective inventory process (physical and annual inventories are taken for the productive units in Chile and the port of Tocopilla; the business subsidiaries depend on the last zero ground obtained, but in general it is at least once a year), these differences are recognized immediately. |
(c) | Potential errors in the determination of stock: The company has an algorithm that is reviewed at least once a year and corresponds to diverse percentages assigned to each inventory based on the product, location, complexity involved in the associated measurement, rotation and control mechanisms. |
(d) | Provisions undertaken by business subsidiaries: these are historical percentages that are adjusted as zero ground is attained based on normal inventory management. |
Inventories of raw materials, materials and supplies for production are recorded at acquisition cost. Cyclical inventories are performed in warehouses, as well as general inventories every three years. Differences are recognized at the moment
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they are detected. The company has a provision based on quarterly calculations from percentages associated with each type of material (classification by warehouse and rotation), these percentages use the lower value resulting from deterioration or obsolescence as well as potential losses. This provision is reviewed at least annually, and considers the historical profit and loss obtained in the inventory processes.
3.16Non-controlling interests
Non-controlling interests are recorded in the consolidated statement of financial position within equity but separate from equity attributable to the owners of the Parent.
3.17Related party transactions
Transactions between the Company and its subsidiaries are part of the Company’s normal operations within its scope of business activities. Conditions for such transactions are those normally effective for those types of operations with regard to terms and market prices. The maturity conditions vary according to the originating transaction.
3.18Property, plant and equipment
Property, plant and equipment are stated at acquisition cost, net of the related accumulated depreciation, amortization and impairment losses that they might have experienced.
In addition to the price paid for the acquisition of tangible property, plant and equipment, the Company has considered the following concepts as part of the acquisition cost, as applicable:
(a) | Accrued interest expenses during the construction period that are directly attributable to the acquisition, construction or production of qualifying assets, which are those that require a substantial period prior to being ready for use. The interest rate used is that related to the project’s specific financing or, should this not exist, the average financing rate of the investor company. |
(b) | The future costs that the Company will have to experience, related to the closure of its facilities at the end of their useful life, are included at the present value of disbursements expected to be required to settle the and its subsequent variation is recorded directly in results. |
Having initially recognized provisions for closure and refurbishment, the corresponding cost is capitalized as an asset in “Property, plant and equipment” and amortized in line with the amortization criteria for the associated assets.
Construction-in-progress is transferred to property, plant and equipment in operation once the assets are available for use and the related depreciation and amortization begins on that date.
Extension, modernization or improvement costs that represent an increase in productivity, ability or efficiency or an extension of the useful lives of property, plant and equipment are capitalized as a higher cost of the related assets. All the remaining maintenance, preservation and repair expenses are charged to expense as they are incurred.
The replacement of assets, which increase the asset’s useful life or its economic capacity, are recorded as a higher value of property, plant and equipment with the related derecognition of replaced or renewed elements.
Gains or losses which are generated from the sale or disposal of property, plant and equipment are recognized as income (or loss) in the period and calculated as the difference between the asset’s sales value and its net carrying value.
Costs derived from the daily maintenance of property, plant and equipment are recognized when incurred.
The cost of interest is recognized by applying an average or average weighted interest rate for all financing costs incurred by the Company to the final monthly balances for works underway and complies with the requirements of IAS 23.
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Financing costs are not activated for periods that exceed the normal term for acquisition, construction or installation of the property; such is the case for delays, interruptions or temporary suspension of the project due to technical, financial or other problems that make it impossible to leave the property in usable conditions.
3.19Depreciation of property, plant and equipment
Property, plant and equipment are depreciated through the straight-line distribution of cost over the estimated technical useful life of the asset, which is the period in which the Company expects to use the asset. When components of one item of property, plant and equipment have different useful lives, they are recorded as separate assets and depreciated over their expected useful lives. Useful lives are reviewed on an annual basis.
Fixed assets located in the Salar de Atacama consider useful life to be the lesser value between the technical useful life and the years remaining until 2030.
In the case of certain mobile equipment, depreciation is performed depending on the hours of operation.
The useful lives used for the depreciation and amortization of assets included in property, plant and equipment in years are presented below:
| Minimum life or |
| Maximum life or |
| Life or average rate | |
Classes of property, plant and equipment | rate (years) | rate (years) | in years | |||
Mining assets |
|
|
| |||
Energy generating assets |
|
|
| |||
Buildings |
|
|
| |||
Supplies and accessories |
|
|
| |||
Office equipment |
|
|
| |||
Transport equipment |
|
|
| |||
Network and communication equipment |
|
|
| |||
IT equipment |
|
|
| |||
Machinery, plant and equipment |
|
|
| |||
Other fixed assets |
|
|
|
3.20Goodwill
Goodwill acquired represents the excess in acquisition cost on the fair value of the Company’s ownership of the net identifiable assets of the subsidiary on the acquisition date. Goodwill acquired related to the acquisition of subsidiaries is included in the line item goodwill, which is subject to impairment tests annually or more frequently if events or changes in circumstances indicate that it might be impaired and is stated at cost less accumulated impairment losses. Gains and losses related to the sale of an entity include the carrying value of goodwill related to the entity sold.
This intangible asset is assigned to cash-generating units with the purpose of testing impairment losses. It is allocated based on cash-generating units expected to obtain benefits from the business combination from which the aforementioned goodwill acquired arose.
3.21Intangible assets other than goodwill
Intangible assets other than goodwill mainly relate to water rights, costs for rights of way for electricity lines, software and licensing costs, the development of computer software and mining property and concession rights.
(a) | Water rights |
Water rights acquired by the Company relate to water from natural sources and are recorded at acquisition cost. The Company separates water rights into:
i) | Finite rights with amortization using the straight-line method, and |
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ii) | Indefinite rights, which are not amortized, given that these assets represent rights granted in perpetuity to the Company, which are subject to an annual impairment assessment. |
(b) | Rights of way for electric lines |
As required for the operation of industrial plants, the Company has paid rights of way in order to install wires for the different electric lines on third party land. These rights are presented under intangible asset. Amounts paid are capitalized at the date of the agreement and amortized in the statement of income, according to the life of the right of way.
(c) | Computer software |
Licenses for IT programs acquired are capitalized based on their acquisition and customization costs. These costs are amortized over their estimated useful lives.
Expenses related to the development or maintenance of IT programs are recognized as an expense as and when incurred. Costs directly related to the production of unique and identifiable IT programs controlled by the Group, and which will probably generate economic benefits that are higher than its costs during more than a year, are recognized as intangible assets. Direct costs include the expenses of employees who develop information technology software and general expenses in accordance with corporate charges received.
The costs of development for IT programs are recognized as assets are amortized over their estimated useful lives.
(d) | Mining property and concession rights |
The Company holds mining property and concession rights from the Chilean and Western Australian Governments. Property rights from the State of Chile are usually obtained at no initial cost (other than the payment of mining patents and minor recording expenses) and once the rights on these concessions have been obtained, they are retained by the Company while annual patents are paid. Such patents, which are paid annually, are recorded as prepaid assets and amortized over the following twelve months. Amounts attributable to mining concessions acquired from third parties that are not from the Chilean Government are recorded at acquisition cost within intangible assets.
Estimated useful lives or amortization rates used for finite identifiable intangible assets
The finite useful life of mining properties is calculated using the productive unit method, except for the mining properties owned by Corfo, which have been leased to the Company and grant it the right to exclusively exploit them until December 31, 2030.
The estimated useful life for software which they are amortized corresponds to the periods defined by the contracts or rights from which they originate.
Minimum and maximum amortization lives or rates of intangible assets:
| Minimum Life or |
| Maximum Life or | |
Estimated useful life or amortization rate | Rate | Rate | ||
Water rights |
|
| ||
Rights of way |
|
| ||
Corfo Mining properties (1) |
|
| ||
Mining rights |
| |||
Intellectual property |
|
| ||
IT programs |
|
|
(1) | Mining properties owned by Corfo and leased to the Company, which grant it the exclusive right to exploit them until December 31, 2030. |
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3.22Research and development expenses
Research and development expenses are charged to profit or loss in the period in which the expenditure was incurred.
3.23 Exploration and evaluation expenses
The Company holds mining concessions for exploration and exploitation of ore, the Company gives the following treatment to expenses associated with exploration and assessment of these resources:
Once the rights have been obtained, the Company records the disbursements directly associated with the exploration and evaluation of the deposit in execution as property, plant and equipment (construction in progress) at its cost. These disbursements include the following items: geological surveys, drilling, borehole extraction and sampling, activities related to the technical assessment and commercial viability of the extraction, and in general, any disbursement directly related to specific projects where the objective is to find ore resources. If the technical studies determine that the ore grade is not economically viable, the asset is directly charged to profit and loss. If determined otherwise, the asset described above is associated with the extractable ore tonnage which is amortized as it is used.
(a) | Limestone and metallic exploration |
These assets are included in Other Non-Current Non-Financial Assets, and the portion related to the area to be exploited in the year are reclassified to Current Inventory, if applicable. Costs related to metal exploration are charged to profit or loss in the period in which they are recognized if the project assessed doesn’t qualify for consideration as advanced exploration otherwise, these are amortized during the development stage.
(b) | Exploration and evaluation at the Mt. Holland Project |
Mount Holland exploration and evaluation expenditure is included in Property, plant and equipment, specifically in Construction in Progress.
3.24Impairment of non-financial assets
Assets subject to depreciation and amortization are also subject to impairment testing, provided that an event or change in the circumstances indicates that the amounts in the accounting records may not be recoverable, an impairment loss is recognized for the excess of the book value of the asset over its recoverable amount.
For assets other than goodwill, the Group annually assesses whether there is any indication that a previously recognized impairment loss may no longer exist or may have decreased. Should such indications exist, the recoverable amount is estimated.
The recoverable amount of an asset is the higher between the fair value of an asset or cash generating unit less costs of sales and its value in use, and is determined for an individual asset unless the asset does not generate any cash inflows that are clearly independent from other assets or groups of assets.
In evaluating value in use, estimated future cash flows are discounted using a pre-tax discount rate that reflects current market assessment, the value of money over time and the specific asset risks.
Impairment losses from continuing operations are recognized with a debit to profit or loss in the categories of expenses associated with the impaired asset function.
For assets other than goodwill, a previously recognized impairment loss is only reversed if there have been changes in the estimates used to determine the asset’s recoverable amount since the last time an impairment loss was recognized. If this is the case, the carrying value of the asset is increased to its recoverable amount. This increased amount cannot exceed the carrying value that would have been determined, net of depreciation, if an asset impairment loss had not been recognized in prior years. This reversal is recognized with a credit to profit or loss.
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Assets with indefinite lives are assessed for impairment annually.
3.25 Minimum dividend
As required by Chilean law and regulations, our dividend policy is decided upon from time to time by our Board of Directors and is announced at the Annual Ordinary Shareholders’ Meeting, which is generally held in April of each year. Shareholder approval of the dividend policy is not required. However, each year the Board must submit the declaration of the final dividend or dividends in respect of the preceding year, consistent with the then-established dividend policy, to the Annual Ordinary Shareholders’ Meeting for approval. As required by the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued shares, we must distribute a cash dividend in an amount equal to at least
3.26 Earnings per share
The basic earnings per share amounts are calculated by dividing the profit for the year attributable to the ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year.
For the year ended December 31 | ||||||
Earnings per Share | 2022 | 2021 | 2020 | |||
Profit attributable to the owners of the parent (ThUS$) | ||||||
Weighted average number of shares | ||||||
Basic earnings per share (US$) | ||||||
Profit attributable to the owners of the parent (ThUS$) | ||||||
Weighted average number of shares | ||||||
Diluted earnings per share (US$) | ||||||
Series A common shares | ||||||
Series B common shares | ||||||
Total weighted average number of shares |
The Company has no instruments that could potentially dilute earnings per share for the three years ended December 31, 2022.
3.27Other provisions
Provisions are recognized when:
● | The Company has a present, legal or constructive obligation as the result of a past event. |
● | It is more likely than not that certain resources must be used, to settle the obligation. |
● | A reliable estimate can be made of the amount of the obligation. |
In the event that the provision or a portion of it is reimbursed, the reimbursement is recognized as a separate asset solely if there is certainty of income.
In the consolidated statement of income, the expense for any provision is presented net of any reimbursement.
Should the effect of the value of money over time be significant, provisions are discounted using a discount rate before tax that reflects the liability’s specific risks. When a discount rate is used, the increase in the provision over time is recognized as a finance cost.
The Company’s policy is to maintain provisions to cover risks and expenses based on a better estimate to deal with possible or certain and quantifiable responsibilities from current litigation, compensations or obligations, pending expenses for which the amount has not yet been determined, collaterals and other similar guarantees for which the Company is
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responsible. These are recorded at the time the responsibility or the obligation that determines the compensation or payment is generated.
3.28Obligations related to employee termination benefits and pension commitments
Obligations towards the Company’s employees comply with the provisions of the collective bargaining agreements in force, which are formalized through collective employment agreements and individual employment contracts, except for the United States, details in Note 17.4.
These obligations are valued using actuarial calculations, according to the projected unit credit method which considers such assumptions as the mortality rate, employee turnover, interest rates, retirement dates, effects related to increases in employees’ salaries, as well as the effects on variations in services derived from variations in the inflation rate.
Actuarial gains and losses that may be generated by variations in defined, pre-established obligations are directly recorded in “Other Comprehensive Income”.
Actuarial losses and gains have their origin in deviations between the estimate and the actual behavior of actuarial assumptions or in the reformulation of established actuarial assumptions.
The Company’s subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation using a net salary progressive rate net of adjustments for inflation, mortality and turnover assumptions, deducting the resulting amounts at present value. The net balance of this obligation is presented under the “Non-Current Provisions for Employee Benefits” (refer to Note 17.4).
3.29Compensation plans
Compensation plans implemented through benefits provided in share-based payments settled in cash are recognized in the financial statements at their fair value, in accordance with IFRS 2. Changes in the fair value of options granted are recognized with a charge to payroll in the results for the period (see Note 17.6).
3.30Revenue recognition
Revenue includes the fair value of considerations received or receivable for the sale of goods and services during the performance of the Company’s activities. Revenue is presented net of value added tax, estimated returns, rebates and discounts and after the elimination of sales among subsidiaries.
Revenues are recognized when the specific conditions for each income stream are met, as follows:
(a) | Sale of goods |
The sale of goods is recognized when the Company has delivered products to the customer, and there is no obligation pending compliance that could affect the acceptance of products by the customer. The delivery does not occur until products have been shipped to the customer or confirmed as received by the customer, and the related risks of obsolescence and loss have been transferred to the customer and the customer has accepted the products in accordance with the conditions established in the sale, when the acceptance period has ended, or when there is objective evidence that those criteria required for acceptance have been met.
Sales are recognized in consideration of the price set in the sales agreement, net of volume discounts and estimated returns at the date of the sale. Volume discounts are evaluated in consideration of annual foreseen purchases and in accordance with the criteria defined in agreements.
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(b) | Sale of services |
Revenue associated with the rendering of services is recognized considering the degree of completion of the service as of the date of presentation of the consolidated classified statement of financial position, provided that the result from the transaction can be estimated reliably.
(c) | Income from dividends |
Income from dividends is recognized when the right to receive the payment is established.
3.31Finance income and finance costs
Finance income is mainly composed of interest income from financial instruments such as term deposits and mutual fund deposits. Interest income is recognized in profit or loss at amortized cost, using the effective interest rate method.
Finance costs are mainly composed of interest on bank borrowing expenses, interest on bonds issued and interest capitalized for borrowing costs for the acquisition, construction or production or qualifying assets. Borrowing costs and bonds issued are also recognized in profit or loss using the effective interest rate method.
3.32Current income tax and deferred
Corporate income tax for the year is determined as the sum of current and deferred income taxes from the different consolidated companies.
Current taxes are based on the application of the various types of taxes attributable to taxable income for the period. The Company periodically assesses the positions taken in the determination of taxes with respect to situations in which the applicable tax regulation is subject to interpretation and considers whether it is probable that a tax authority will accept an uncertain tax treatment. The Company measures its tax balances based on the most likely amount or expected value, depending on which method provides a better prediction of the resolution of uncertainty.
Differences between the book value of assets and liabilities and their tax basis generate the balance of deferred tax assets or liabilities, which are calculated using the tax rates expected to be applicable when the assets and liabilities are realized.
In conformity with current tax regulations, the provision for corporate income tax and taxes on mining activity is recognized on an accrual basis, presenting the net balances of accumulated monthly tax provisional payments for the fiscal period and associated credits. The balances of these accounts are presented in current income taxes recoverable or current taxes payable, as applicable.
Income tax and variations in deferred tax assets or liabilities that are not the result of business combinations are recorded in income or equity, considering the origin of the gains or losses which have generated them.
At each reporting period, the carrying amount of deferred tax assets is reviewed and recognized only if it is probable that future taxable amounts will be available to allow the recovery of all or a portion of the deferred tax assets.
With respect to deductible temporary differences associated with investments in subsidiaries, associated companies and interest in joint ventures, deferred tax assets are recognized solely provided that it is more likely than not that the temporary differences will be reversed in the near future and that there will be taxable income with which they may be used. The deferred taxes related to items directly recognized in equity is registered with effect on other comprehensive income and not with effect on income.
Deferred tax assets and liabilities are offset if there is a legally receivable right of offsetting tax assets against tax liabilities and the deferred tax is related to the same tax entity and authority.
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The recognized deferred tax assets refer to the amount of income tax to recover in future periods, related to:
a) | deductible temporary differences; |
b) | compensation for losses obtained in prior periods, which have not yet been subject to tax deduction; and |
c) | compensation for unused credits from prior periods. |
The Company recognizes deferred tax assets when it has the certainty that they can be offset with tax income from subsequent periods, unused tax losses or credits to date, but only when this availability of future tax income is probable and can be used for offsetting these unused tax losses or credits.
The recognized deferred tax liabilities refer to the amount of income tax to pay in a future period, related to taxable temporary differences.
The Company does not recognize deferred tax liabilities in all cases of taxable temporary differences associated with investments in subsidiaries, branches and associates, or with joint ventures, because based on the standard, the two following conditions both apply:
(i) | the parent company, investor or shareholder is capable of controlling the moment of the reversal of temporary differences; and |
(ii) | it is probable that the temporary difference will not be reversed in the foreseeable future. |
Moreover, the Company does not recognize deferred tax assets for all the deductible temporary differences that originate from investments in subsidiaries, branches and associates, or from joint ventures, because it is unlikely that they meet the following requirements:
(i) | temporary differences are reversed in the foreseeable future; and |
(ii)there is taxable profit available against which temporary differences can be used.
3.33Operating segment reporting
IFRS 8 requires that companies adopt a management approach to disclose information on the operations generated by its operating segments. In general, this is the information that management uses internally for the evaluation of segment performance and making the decision on how to allocate resources for this purpose.
An operating segment is a group of assets and operations responsible for providing products or services subject to risks and performance that are different from those of other business segments. A geographical segment is responsible for providing products or services in a given economic environment subject to risks and performance that are different from those of other segments operating in other economic environments.
Allocation of assets and liabilities, to each segment is not possible given that these are associated with more than one segment, except for depreciation, amortization and impairment of assets, which are directly allocated in accordance with the criteria established in the costing process for product inventories to the corresponding segments.
3.34 Primary accounting criteria, estimates and assumptions
Management is responsible for the information contained in these consolidated annual accounts, which expressly indicate that all the principles and criteria included in IFRS, as issued by the IASB, have been applied in full.
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In preparing the consolidated financial statements of the Company and its subsidiaries, management has made significant judgments and estimates to quantify certain assets, liabilities, revenues, expenses and commitments included therein. Basically, these estimates refer to:
● | Estimated useful lives are determined based on current facts and past experience and take into consideration the expected physical life of the asset, the potential for technological obsolescence, and regulations. (See Notes 3.21, 14 and 15). |
● | Impairment losses of certain assets - Goodwill and intangible assets that have an indefinite useful life are not amortized and are assessed for impairment on an annual basis, or more frequently if the events or changes in circumstances indicate that these may have deteriorated Other assets, including property, plant and equipment, exploration assets, goodwill and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts exceed their recoverable amounts. If an impairment assessment is required, the assessment of fair value or value in use often requires estimates and assumptions such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance. Changes in such estimates could impact the recoverable values of these assets. Estimates are reviewed regularly by management (See Notes 14 and 15). |
● | Assumptions used in calculating the actuarial amount of pension-related and severance indemnity payment benefit commitments (See Note 17). |
● | Contingencies – The amount recognized as a provision, including legal, contractual, constructive and other exposures or obligations, is the best estimate of the consideration required to settle the related liability, including any related interest charges, considering the risks and uncertainties surrounding the obligation. In addition, contingencies will only be resolved when one or more future events occur or fail to occur. Therefore, the assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. The Company assesses its liabilities and contingencies based upon the best information available, relevant tax laws and other appropriate requirements (See Note 20). If the Company is unable to rationally estimate the obligation or concluded no loss is probable but it is reasonably possible that a loss may be incurred, no provision is recorded but disclosed in the notes to the consolidated financial statements. |
● | Volume determination for certain in-process and finished products is based on topographical measurements and technical studies that cover the different variables (density for bulk inventories and density and porosity for the remaining stock, among others), and related allowance. |
● | Estimates for obsolescence provisions to ensure that the carrying value of inventory is not in excess of the net realizable inventory valuation. (See Note 10). |
Even though these estimates have been made on the basis of the best information available on the date of preparation of these consolidated financial statements, certain events may occur in the future and oblige their amendment (upwards or downwards) over the next few years, which would be made prospectively.
Note 4Financial risk management
4.1Financial risk management policy
The Company’s financial risk management policy is focused on safeguarding the stability and sustainability of the Company and its subsidiaries with regard to all such relevant financial uncertainty components.
The Company’s operations are subject to certain financial risk factors that may affect its financial position or results. The most significant risk exposures are market risk, liquidity risk, currency risk, credit risk, and interest rate risk, among others.
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There could also be additional risks, which are either unknown or known but not currently deemed to be significant, which could also affect the Company’s business operations, its business, financial position, or profit or loss.
The financial risk management structure includes identifying, determining, analyzing, quantifying, measuring and controlling these events. Management and in particular, Finance Management, is responsible for constantly assessing the financial risk.
4.2Risk Factors
(a) | Credit risk |
A global economic contraction may have potentially negative effects on the financial assets of the Company, which are primarily made up of financial investments and trade receivables, and the impact on of our customers could extend the payment terms of the Company’s receivables by increasing its exposure to credit risk. Although measures are taken to minimize the risk, this global economic situation could mean losses with adverse material effects on the business, financial position or profit and loss of the Company’s operations.
Trade receivables: to mitigate credit risk, the Company maintains active control of collection and requires the use of credit insurance. Credit insurance covers the risk of insolvency and unpaid invoices corresponding to
Bank promissory notes: These are negotiable promissory notes issued at the request of customers by a bank payable upon maturity to guarantee collection. These notes are accepted based on the credit quality of the issuing banks.
As of | ||||||||||
December 31, | ||||||||||
Financial institution | Financial assets | Rating | 2022 | |||||||
|
| Moody´s |
| S&P |
| Fitch |
| ThUS$ | ||
Agricultural Bank of China | Bank notes | P-1 | A-1 | F1+ | | |||||
Bank of China Limited |
| Bank notes |
| P-1 |
| A-1 |
| F1+ |
| |
Bank of Jiujiang |
| Bank notes |
| P-2 |
| - |
| - |
| |
Bank of Ningbo |
| Bank notes |
| P-2 |
| - |
| - |
| |
Others | Bank notes | - | - | - | | |||||
Total |
|
|
|
|
|
|
|
|
| |
December 31, | ||||||||||
Financial institution | Financial assets | Rating | 2021 | |||||||
|
| Moody´s |
| S&P |
| Fitch |
| ThUS$ | ||
Agricultural Bank of China | Bank notes | P-1 | A-1 | A | | |||||
Bank of China Limited |
| Bank notes |
| P-1 |
| A-1 |
| A |
| |
Bank of Communications |
| Bank notes |
| P-1 |
| A-2 |
| A |
| |
China CITIC Bank Corp Ltd |
| Bank notes |
| P-2 |
| A-2 |
| BBBu |
| |
China Construction Bank Corporation | Bank notes | - | A-1 | A | | |||||
China Everbrith Bank Co. Ltd | Bank notes | (P) P-2 | A-2 | BBB | | |||||
China Merchants Bank | Bank notes | - | A-2 | A-u | | |||||
China Minsheng Bank Corporation | Bank notes | - | A-3 | BB+u | | |||||
Industrial & Commercial Bank of China Limited | Bank notes | P-1 | A-1 | Au | | |||||
Industrial Bank | Bank notes | P-2 | - | BBB | | |||||
Ping An Bank | Bank notes | P-2 | A-2 | BB+u | | |||||
Shanghai Pudong Development Bank Co. Ltd | Bank notes | P-2 | A-2 | BBB | | |||||
China Development Bank | Bank notes | A1 | A-1 | F1+u | | |||||
Postal Savings Bank of China | Bank notes | - | A-1 | A+ | | |||||
KEB Hana Bank (China) | Bank notes | P-1 | A-1 | F1+ | | |||||
Total |
|
|
|
|
|
|
|
|
| |
Concentrations of credit risk with regard to trade receivables are reduced, owing to the Company’s large number of clients and their distribution around the globe.
F-39
No significant modifications have been made during the period to risk models or parameters used in comparison to December 31, 2022, and no modifications have been made to contractual cash flows that have been significant during this period, except for considering in December 2022 the incorporation of cash flows received from insurance claims in the determination of the allowance for doubtful accounts. The effect of this change was not significant to the overall financial statements as of December 31, 2022.
Financial investments: correspond to time deposits whose maturity date is greater than 90 days and less than 360 days from the date of investment, so they are not exposed to excessive market risks. The counterparty risk in implementation of financial operations is assessed on an ongoing basis for all financial institutions in which the Company holds financial investments.
The credit quality of financial assets that are not past due or impaired can be evaluated by reference to external credit ratings (if they are available) or historical information on counterparty late payment rates:
As of | ||||||||||
December 31, | ||||||||||
Financial institution | Financial assets | Rating | 2022 | |||||||
|
| Moody´s |
| S&P |
| Fitch |
| ThUS$ | ||
Banco crédito e Inversiones | Time deposits | - | A-2 | F2 | | |||||
Banco Itaú Corpbanca |
| Time deposits |
| P-2 |
| A-2 |
| - |
| |
Banco Santander – Santiago |
| Time deposits |
| P-1 |
| A-2 |
| - |
| |
Scotiabank Chile |
| Time deposits |
| - |
| - |
| F1+ |
| |
Sumitomo Mitsui Banking |
| Time deposits |
| P-1 |
| - |
| - |
| |
Banco de Chile |
| Time deposits |
| - |
| A-1 |
| - |
| |
JP Morgan US Dollar liquidity Fund Institucional | Investment fund | Aaa-mf | AAAm | AAAmmf | | |||||
Legg Mason - Western Asset Institutional cash reserves |
| Investment fund |
| - |
| AAAm |
| AAAmmf |
| |
Total |
|
|
|
|
|
|
|
|
| |
Banco crédito e Inversiones | Time deposits | - | A-2 | F2 | | |||||
Banco Itaú Corpbanca |
| Time deposits |
| P-2 |
| A-2 |
| - |
| |
Banco Santander - Santiago | Time deposits | P-1 | A-2 | - | | |||||
Banco Estado |
| Time deposits |
| P-1 |
| A-1 |
| - |
| |
Scotiabank Chile |
| Time deposits |
| - |
| - |
| F1+ |
| |
Banco de Chile |
| Time deposits |
| - |
| A-1 |
| - |
| |
Sumitomo Mitsui Banking | Time deposits | P-1 | - | - | | |||||
Total |
|
|
|
|
|
|
|
|
| |
As of | ||||||||||
December 31, | ||||||||||
Financial institution | Financial assets | Rating | 2021 | |||||||
|
| Moody´s |
| S&P |
| Fitch |
| ThUS$ | ||
Banco crédito e Inversiones | Time deposits | P-1 | A-2 | F2- | | |||||
Banco Itaú Corpbanca |
| Time deposits |
| P-2 |
| A-2 |
| - |
| |
Banco Santander – Santiago |
| Time deposits |
| P-1 |
| A-2 |
| - |
| |
Scotiabank Sud Americano |
| Time deposits |
| P-1 |
| A-1 |
| F1+ |
| |
Other banks |
| Time deposits |
| - |
| - |
| F1+ |
| |
JP Morgan US dollar Liquidity Fund Institutional |
| Investment fund |
| Aaa-mf |
| AAAm |
| AAAmmf |
| |
Legg Mason - Western Asset Institutional cash reserves |
| Investment fund |
| - |
| AAAm |
| AAAmmf |
| |
Total |
|
|
|
|
|
|
|
|
| |
Banco crédito e Inversiones | Time deposits | P-1 | A-2 | - | | |||||
Banco Itaú Corpbanca |
| Time deposits |
| P-2 |
| A-2 |
| - |
| |
Banco Santander - Santiago |
| Time deposits |
| P-1 |
| A-2 |
| - |
| |
Scotiabank Sud Americano |
| Time deposits |
| P-1 |
| A-1 |
| F1+ |
| |
Sumitomo Mitsui Banking |
| Time deposits |
| P-1 |
| - |
| F1 |
| |
Total |
|
|
|
|
|
|
|
|
| |
F-40
(b) | Currency risk |
The functional currency of the company is the US dollar, due to its influence on the determination of price levels, its relation to the cost of sales and considering that a significant part of the Company’s business is conducted in this currency. However, the global nature of the Company’s business generates an exposure to exchange rate variations of several currencies with the US dollar. Therefore, the Company maintains hedge contracts to mitigate the exposure generated by its main mismatches (net between assets and liabilities) in currencies other than the US dollar against the exchange rate variation, updating these contracts periodically depending on the amount of mismatching to be covered in these currencies. Occasionally, subject to the approval of the Board, the Company ensures short-term cash flows from certain specific line items in currencies other than the US dollar.
A significant portion of the Company’s costs, especially salary payments, is associated with the Peso. Therefore, an increase or decrease in its exchange rate with the US dollar will provoke a respective decrease or increase to these accounting costs, which would be reflected in the Company’s profit and loss. By the fourth quarter of 2022, approximately US$
As of December 31, 2022, the Company held derivative instruments classified as hedges of foreign exchange risks associated with
Furthermore, on of December 31, 2022, the Company held derivative instruments classified as hedges of foreign exchange risks associated with
The Company contracted derivatives classified as foreign exchange hedges for all the expected disbursements in Australian dollars for the Mt Holland project (See note 8.5), to hedge its exposure to cash flow variations. The fair value of this hedge was a net asset of US$
The Company had the following derivative contracts as of December 31, 2022 (at the absolute value of the sum of their notional values), to hedge the difference between its assets and liabilities: US$
These derivative contracts are held with domestic and foreign banks, which have the following credit ratings as of December 31, 2022.
Financial institution | Financial assets | Rating | ||||||
|
| Moody´s |
| S&P |
| Fitch | ||
Banco Estado | Derivative | P-1 | A-1 | - | ||||
Merrill Lynch International |
| Derivative |
| - |
| A-1 |
| - |
JP Morgan | Derivative | P-1 | A-2 | F1+ | ||||
Morgan Stanley |
| Derivative |
| P-1 |
| A-2 |
| F1 |
The Bank of Nova Scotia |
| Derivative |
| P-1 |
| A-1 |
| F1+ |
Banco Itaú-Corpbanca |
| Derivative |
| P-2 |
| A-2 |
| - |
Goldman Sachs |
| Derivative |
| P-1 |
| A-2 |
| F1 |
(c)Interest rate risk
Interest rate fluctuations, primarily due to the uncertain future behavior of markets, may have a material impact on the financial results of the Company. Significant increases in the rate could make it difficult to access financing at attractive rates for the Company’s investment projects.
F-41
The Company maintains current and non-current financial debt at fixed rates and LIBOR (maturing on May 30, 2023) rate plus spread and at a SOFR rate plus spread.
As of December 31, 2022, the Company has
(d)Liquidity risk
Liquidity risk relates to the funds needed to comply with payment obligations. The Company’s objective is to maintain financial flexibility through a comfortable balance between fund requirements and cash flows from regular business operations, bank borrowings, bonds, short term investments and marketable securities, among others. For this purpose, the Company keeps a high liquidity ratio1, which enables it to cover current obligations with clearance. (As of December 31, 2022 this was
The Company has an important capital expense program which is subject to change over time.
On the other hand, world financial markets go through periods of contraction and expansion that are unforeseeable in the long-term and may affect the Company’s access to financial resources. Such factors may have a material adverse impact on the Company’s business, financial position and results of operations.
The Company constantly monitors the matching of its obligations with its investments, taking due care of maturities of both, from a conservative perspective, as part of this financial risk management strategy. As of December 31, 2022, the Company had unused, available revolving credit facilities with banks, for a total of US$
1 | All current assets divided by all current liabilities. |
F-42
Cash and cash equivalents are invested in highly liquid mutual funds with an AAA risk rating.
Nature of undiscounted cash flows | ||||||||||
As of December 31, 2022 | Carrying | |||||||||
(figures expressed in millions of US dollars) |
| amount |
| Less than 1 year |
| 1 to 5 years |
| Over 5 years |
| Total |
Bank borrowings | | | | | | |||||
Unsecured obligations |
| |
| |
| |
| |
| |
Sub total |
| |
| |
| |
| |
| |
Hedging liabilities |
| |
| |
| |
| |
| |
Derivative financial instruments |
| |
| |
| |
| |
| |
Sub total |
| |
| |
| |
| |
| |
Current and non-current lease liabilities |
| |
| |
| |
| |
| |
Trade accounts payable and other accounts payable |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
| |
Nature of undiscounted cash flows | ||||||||||
As of December 31, 2021 | Carrying | |||||||||
(figures expressed in millions of US dollars) |
| amount |
| Less than 1 year |
| 1 to 5 years |
| Over 5 years |
| Total |
Bank borrowings | | | | | | |||||
Unsecured obligations |
| |
| |
| |
| |
| |
Sub total |
| |
| |
| |
| |
| |
Hedging liabilities |
| |
| |
| |
| |
| |
Derivative financial instruments |
| |
| |
| |
| |
| |
Sub total |
| |
| |
| |
| |
| |
Current and non-current lease liabilities |
| |
| |
| |
| |
| |
Trade accounts payable and other accounts payable |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
| |
As of December 31, 2022, the nominal value of the agreed cash flows in US dollars of the CCS contracts were ThUS$
4.3Risk measurement
The Company documents and maintains methods for qualitatively measuring the effectiveness and efficiency of financial risk management strategies. These methods are consistent with SQM Group’s risk management profile.
Note 5Separate information on the main office, parent entity and joint action agreements
5.1 | Parent’s stand-alone assets and liabilities |
As of | As of | |||
December 31, | December 31, | |||
Parent’s stand-alone assets and liabilities | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Assets |
| |
| |
Liabilities |
| ( |
| ( |
Equity |
| |
| |
5.2 | Parent entity |
Pursuant to Article 99 of the Securities Market Law, the CMF may determine that a company does not have a controlling entity in accordance with the distribution and dispersion of its ownership. On November 30, 2018, the CMF issued the ordinary letter No. 32,131 whereby it determined that the Pampa Group do not exert decisive power over the management of the Company since it does not have a predominance in the ownership that allows it to make management decisions. Therefore, the CMF has determined not to consider Pampa Group the controlling entity of the Company and that the Company does not have a controlling entity given its current ownership structure.
F-43
Note 6Board of Directors, Senior Management and Key management personnel
6.1Remuneration of the Board of Directors and Senior Management
(a) | Board of directors |
SQM S.A. is managed by a Board of Directors which is composed of
- | Directors’ Committee: This committee is comprised by Gina Ocqueteau Tacchini, Antonio Gil Nievas and Ashley Ozols and fulfills the functions established in Article 50 bis of Chilean Law on publicly-held corporations. This committee takes on the role of the audit committee in accordance with the US-based Sarbanes Oxley law. |
- | The Company’s Health, Safety and Environment Committee: This committee is comprised of Gonzalo Guerrero Yamamoto, Patricio Contesse Fica and Dang Qi. |
- | Corporate Governance Committee: This committee is comprised of Hernán Büchi Buc, Patricio Contesse Fica and Antonio Schneider Chaigneau. |
During the periods covered by these financial statements, there are no pending receivable and payable balances between the Company, its directors or members of Senior Management, other than those related to remuneration, fee allowances and profit-sharing. Except for a consulting contract between the Company and the Director Gonzalo Guerrero as disclosed in Note 11. There were no other transactions conducted between the Company, its directors or members of Senior Management.
(b) | Board of Directors’ Compensation |
Board members’ compensation for 2021, that is from April 23, 2021 to April 26, 2022, was determined by the Annual General Shareholders Meeting held on April 23, 2021. It is as follows:
(i) | The payment of a fixed, gross and monthly amount of UF |
(ii) | A variable gross amount payable to the Chairman and Vice President of the board of directors equivalent to |
(iii) | A variable gross amount payable to each Company director, excluding the Chairman and Vice President of the board of directors, equivalent to |
Compensation of the Board for 2022, that is from April 26, 2022 to April 26, 2023, was determined by the Annual General Shareholders Meeting held on April 26, 2022. It is as follows:
(i) | The payment of a fixed, gross and monthly amount of UF |
(ii) | A variable gross amount payable to the Chairman and Vice President of the board of directors equivalent to |
(iii) | A variable gross amount payable in local currency to each Company director, excluding the Chairman and Vice President of the Company, equivalent to |
To calculate the variable compensation amount for 2022, net earnings from 2022 will be considered, up to a maximum of
These fixed and variable amounts for both periods shall not be challenged and those expressed in percentage terms shall be paid immediately after the respective annual general shareholders meeting approves the financial statements, the annual report, the account inspectors report and the external auditors report for the respective year.
F-44
Accordingly, the compensation and profit sharing paid to members of the Directors' Committee and the directors as of December 31, 2022, amounted to ThUS$
(c) | Directors’ Committee compensation |
Compensation for the Board of Directors is the same for both 2021 and 2022, as follows:
(i) | The payment of a fixed, gross and monthly amount of UF |
(ii) | The payment in domestic currency and in favor of each of the |
To calculate the variable compensation amount for 2022, the net income from 2022 will be considered, up to a maximum of
These fixed and variable amounts for both periods shall not be challenged and those expressed in percentage terms shall be paid immediately after the respective annual general shareholders meeting approves the financial statements, the annual report, the account inspectors report and the external auditors report for the respective year.
(d) | Health, Safety and Environmental Matters Committee: |
The remuneration of this committee for the 2021 period was composed of the payment of a fixed, gross, monthly amount of UF
(e) | Corporate Governance Committee |
The remuneration for this committee for the 2021 period was composed of the payment of a fixed, gross, monthly amount of UF
(f) | Guarantees constituted in favor of the directors |
No guarantees have been constituted in favor of the directors.
(g) | Senior management compensation: |
(i) | This includes monthly fixed salary and variable performance bonuses. (See Note 6.2) |
(ii) | The Company has an annual bonus plan based on goal achievement and individual contribution to the Company’s results. These incentives are structured as a minimum and maximum number of gross monthly salaries and are paid once a year. |
(iii) | In addition, there are retention bonuses for its executives (see Note 17.6) |
(h) | Guarantees pledged in favor of the Company’s management |
No guarantees have been pledged in favor of the Company’s management.
(i) | Pensions, life insurance, paid leave, shares in earnings, incentives, disability loans, other than those mentioned in the above points. |
The Company’s Management and Directors do not receive or have not received any benefit during the years ended December 31, 2022, 2021 and 2020 or compensation for the concept of pensions, life insurance, paid time off, profit sharing, incentives, or benefits due to disability other than those mentioned in the preceding points.
F-45
6.2 Key management personnel compensation
As of December 31, 2022, and 2021, the number of the key management personnel is
For the year ended | For the year ended | For the year ended | ||||
December 31, | December 31, | December 31, | ||||
Key management personnel compensation | 2022 | 2021 | 2020 | |||
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Key management personnel compensation |
| |
| |
| |
Please also see the description of the compensation plan for executives in Note 17.6.
Note 7Equity-accounted investees
7.1Investments in associates recognized according to the equity method of accounting
Share in profit (loss) of associates | Share in other comprehensive income of | Share in total comprehensive income of | ||||||||||||||||||||||
accounted for using the equity | associates accounted for using the equity | associates accounted for using the equity | ||||||||||||||||||||||
Equity-accounted investees | method | method | method | |||||||||||||||||||||
For the year | For the year | For the year | For the year | For the year | For the year | For the year | For the year | For the year | ||||||||||||||||
As of | As of | As of | ended | ended | ended | ended | ended | ended | ended | ended | ended | |||||||||||||
December | December | December | December | December | December | December | December | December | December | December | December | |||||||||||||
Associate | 31, 2022 | 31, 2021 | 31, 2020 | 31, 2022 | 31, 2021 | 31, 2020 | 31, 2022 | 31, 2021 | 31, 2020 | 31, 2022 | 31, 2021 | 31, 2020 | ||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||
Abu Dhabi Fertilizer Industries WWL |
| |
| |
| |
| |
| |
| ( |
| |
| |
| |
| |
| |
| ( |
Doktor Tarsa Tarim Sanayi AS (*) |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Ajay North America |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Ajay Europe SARL |
| |
| |
| |
| |
| |
| |
| ( |
| |
| |
| |
| |
| |
SQM Eastmed Turkey (*) |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Kore Potash PLC (**) |
| |
| |
| |
| |
| |
| ( |
| |
| |
| ( |
| |
| |
| ( |
Total |
| |
| |
| |
| |
| |
| |
| ( |
| |
| |
| |
| |
| |
(*) | These investments were disposed of in 2020 |
(**) | For more details, see Note 7.3 (b). |
F-46
Dividends received for the year ending | ||||||||||||||
Share of | ||||||||||||||
Description of the nature | Country of | ownership in | December 31, | December 31, | December 31, | |||||||||
Associate | of the relationship | Address | incorporation | associates |
| 2022 |
| 2021 |
| 2020 | ||||
| ThUS$ |
| ThUS$ |
| ThUS$ | |||||||||
Abu Dhabi Fertilizer Industries WWL |
| Distribution and commercialization of specialty plant nutrients in the Middle East. |
| PO Box 71871, Abu Dhabi |
| United Arab Emirates |
| | % | |
| |
| |
Ajay North America |
| Production and distribution of iodine and iodine derivatives. |
| 1400 Industry RD Power Springs GA 30129 |
| United States of North America |
| | % | |
| |
| |
Ajay Europe SARL |
| Production and distribution of iodine and iodine derivatives. |
| Z.I. du Grand Verger BP 227 53602 Evron Cedex |
| France |
| | % | |
| |
| |
Total |
|
|
|
|
|
|
|
|
| |
| |
| |
7.2Assets, liabilities, revenue and expenses of associates
The information disclosed reflects the amounts presented in the financial statements of the relevant associates and not the Company's share of those amounts.
As of December 31, 2022 | For the year ended December 31, 2022 | |||||||||||||||
Assets | Liabilities | Other | ||||||||||||||
comprehensive | Comprehensive | |||||||||||||||
Associate |
| Current |
| Non-current |
| Current |
| Non-current | Revenue | Net income (loss) | income | income | ||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Ajay North America |
| |
| |
| |
| |
| |
| |
| |
| |
Ajay Europe SARL |
| |
| |
| |
| |
| |
| |
| ( |
| |
Total |
| |
| |
| |
| |
| |
| |
| ( |
| |
As of December 31, 2021 | For the year ended December 31, 2021 | |||||||||||||||
Assets | Liabilities | Other | ||||||||||||||
comprehensive | Comprehensive | |||||||||||||||
Associate |
| Current |
| Non-current |
| Current |
| Non-current | Revenue | Net income (loss) | income | income | ||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Ajay North America |
| |
| |
| |
| |
| |
| |
| |
| |
Ajay Europe SARL |
| |
| |
| |
| |
| |
| |
| ( |
| |
Total |
| |
| |
| |
| |
| |
| |
| ( |
| |
As of December 31, 2020 | For the year ended December 31, 2020 | |||||||||||||||
Assets | Liabilities | Other | ||||||||||||||
comprehensive | Comprehensive | |||||||||||||||
Associate |
| Current |
| Non-current |
| Current |
| Non-current | Revenue | Net income (loss) | income | income | ||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Abu Dhabi Fertilizer Industries WWL |
| |
| |
| |
| |
| |
| ( |
| |
| ( |
Ajay North America |
| |
| |
| |
| |
| |
| |
| |
| |
Ajay Europe SARL |
| |
| |
| |
| |
| |
| |
| |
| |
Kore Potash PLC |
| |
| |
| |
| |
| |
| ( |
| |
| ( |
Total |
| |
| |
| |
| |
| |
| |
| |
| |
7.3Disclosures regarding interests in associates
(a) | Transactions for the year ended December 31, 2022: |
● | During February 2022, the Company received dividends of ThUS$ |
(b) | Transactions for the year ended December 31, 2021: |
● | During the first quarter 2021, Kore Potash PLC made a share payment to its non-executive board members (remuneration shares) plus certain employees and former employees (performance shares) which resulted in a |
F-47
in a dilution of |
● | As of December 31, 2021, the Company received dividends from Abu Dhabi Fertilizer Industries WWL of ThUS$ |
● | On June 30, 2021, the Company made an assessment of the recovery of the investment in Abu Dhabi Fertilizer Industries WWL and recognized an impairment of ThUS$ |
(c) | Transactions for the year ended December 31, 2020: |
● | Kore Potash PLC made a share payment to its non-executive board members, which resulted in a |
● | In the third quarter of 2020 SQM S.A. increased its shares in Kore Potash PLC to |
● | In the third quarter of 2020, shares held in Doktor Tarsa Tarim and its subsidiaries were sold through Soquimich European Holdings B.V. at a value of ThUS$ |
● | In the third quarter of 2020, shares held in SQM Eastmed Turkey were sold through Soquimich European Holdings B.V. at a value of ThUS$ |
● | During the fourth quarter of 2020, SQM Holland (subsidiary) acquired the business of WSNPK from Plantacote N.V. (subsidiary of Doktor Tarsa Tarim Sanayi AS) for ThUS$ |
● | During the fourth quarter of 2020, Kore Potash PLC made a share-based payment to its non-executive board members, which resulted in a |
F-48
Note 8Joint Ventures
8.1Investment in joint ventures accounted for under the equity method of accounting.
Share in profit (loss) of joint ventures | ||||||||||||
Equity-accounted investees | accounted for using the equity method | |||||||||||
As of | As of | As of | For the year ended | For the year ended | For the year ended | |||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||
Joint Venture | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
SQM Vitas Fzco. |
| |
| |
| |
| |
| |
| |
SQM Qingdao Star Corp Nutrition Co. Ltd. |
| |
| |
| — |
| |
| |
| |
Pavoni & C. Spa |
| |
| |
| |
| |
| |
| |
Covalent Lithium Pty Ltd. |
| |
| |
| — |
| |
| |
| |
Sichuan SQM Migao Chemical Fertilizers Co Ltd. |
| |
| |
| |
| |
| |
| ( |
Total |
| |
| |
| |
| |
| |
| |
Share on other comprehensive income joint ventures | Share on total comprehensive income of joint ventures | |||||||||||
accounted for using the equity method | accounted for using the equity method | |||||||||||
As of | As of | As of | For the year ended | For the year ended | For the year ended | |||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||
Joint Venture | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Coromandel SQM India (*) |
| |
| |
| |
| |
| |
| — |
SQM Vitas Fzco. |
| |
| |
| ( |
| |
| |
| |
SQM Qingdao Star Corp Nutrition Co. Ltd. (*) |
| |
| |
| |
| |
| |
| |
SQM Vitas B.V. |
| |
| |
| |
| |
| |
| — |
Pavoni & C. Spa |
| ( |
| ( |
| |
| |
| ( |
| |
Covalent Lithium Pty Ltd. |
| |
| |
| |
| |
| |
| |
Sichuan SQM Migao Chemical Fertilizers Co Ltd. |
| |
| |
| |
| |
| |
| ( |
Total |
| |
| |
| ( |
| |
| |
| |
(*) | These investments were disposed of in 2021 |
(*) | See more details in Note 8.4 (a). |
F-49
The amounts described in the following box represent numbers used in the consolidation of the company:
Equity-accounted investees | Share in profit (loss) of joint ventures | |||||||||||
accounted for using the equity method | ||||||||||||
As of | As of | As of | For the year ended | For the year ended | For the year ended | |||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||
Joint Venture | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
SQM Vitas Brasil Agroindustria (1) |
| |
| |
| |
| |
| |
| |
SQM Vitas Perú S.A.C. (1) |
| |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| | | |
Share on other comprehensive income of | Share on total comprehensive income of | |||||||||||
joint ventures accounted for using | joint ventures accounted for using | |||||||||||
the equity method, for the period ended | the equity method, for the period ended | |||||||||||
As of | As of | As of | For the year ended | For the year ended | For the year ended | |||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||
Joint Venture | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
SQM Vitas Brasil Agroindustria (1) |
| |
| ( |
| ( |
| |
| |
| ( |
SQM Vitas Perú S.A.C. (1) |
| |
| |
| — |
| |
| |
| |
Total |
| |
| ( |
| ( |
| |
| |
| |
(1) | The companies are subsidiaries of: |
SQM Vitas Fzco.
Dividends received for the year ending | ||||||||||||||
Share of | As of | As of | As of | |||||||||||
| Description of the nature |
|
| Country of |
| interest in |
| December 31, |
| December 31, |
| December 31, | ||
Joint venture | of the relationship | Domicile | incorporation | ownership | 2022 | 2021 | 2020 | |||||||
| ThUS$ |
| ThUS$ |
| ThUS$ | |||||||||
Sichuan SQM Migao Chemical Fertilizers Co Ltd. |
| Production and distribution of soluble fertilizers. |
| Huangjing Road, Dawan Town, Qingbaijiang Dristrict, Chengdu Municipality, Sichuan Province |
| China |
| | % | |
| |
| |
SQM Vitas Fzco. |
| Production and commercialization of specialty plant, animal nutrition and industrial hygiene. |
| Jebel ALI Free Zone P.O. Box 18222, Dubai |
| United Arab Emirates |
| | % | |
| |
| |
SQM Qingdao Star Corp Nutrition Co. Ltd. |
| Production and distribution of nutrient plant solutions with specialties NPK soluble. |
| Longquan Town, Jimo City, Qingdao Municipality, Shangdong Province |
| China |
| | % | |
| |
| |
Pavoni & C. Spa |
| Production of specialty fertilizers and others for distribution in Italy and other countries. |
| Corso Italia 172, 95129 Catania -CT, Sicilia |
| Italy |
| | % | |
| |
| |
SQM Vitas Brasil Agroindustria (1) | Production and trading of specialty vegetable and animal nutrition and industrial hygiene. | Via Cndeias, Km. 01 Sem Numero, Lote 4, Bairro Cia Norte, Candeias, Bahia. | Brazil | | % | | | | ||||||
SQM Vitas Perú S.A.C. (1) | Production and trading of specialty vegetable and animal nutrition and industrial hygiene | Av. Juan de Arona 187, Torre B, Oficina 301-II, San Isidro, Lima | Peru | | % | | | | ||||||
Covalent Lithium Pty Ltd. |
| Development and operation of the Mt. Holland Lithium project, which will include the construction of a lithium extraction and refining mine. |
| L18, 109 St Georges Tce Perth WA 6000 |PO Box Z5200 St Georges Tce Perth WA 6831 |
| Australia |
| | % | |
| |
| |
Total |
|
|
|
|
|
| |
| |
| |
(*) | The percentages presented correspond to the ownership used in the consolidation of the company. |
8.2Assets, liabilities, revenue and expenses from joint ventures
The information disclosed reflects the amounts presented in the financial statements of the relevant joint ventures and not the Company's share of those amounts.
F-50
| As of December 31, 2022 |
| For the year ended December 31, 2022 | |||||||||||||
Assets | Liabilities | Other | ||||||||||||||
comprehensive | Comprehensive | |||||||||||||||
Joint Venture |
| Current |
| Non-current |
| Current |
| Non-current |
| Revenue |
| Net income (loss) |
| income |
| income |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
SQM Vitas Fzco. (*) |
| |
| — |
| |
| |
| |
| |
| |
| |
SQM Vitas Brasil Agroindustria (*) |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Vitas Perú S.A.C. (*) |
| |
| |
| |
| |
| |
| |
| |
| |
Pavoni & C. Spa (*) |
| |
| |
| |
| |
| |
| |
| ( |
| |
Covalent Lithium Pty Ltd. |
| |
| |
| |
| |
| |
| ( |
| |
| ( |
Total |
| |
| |
| |
| |
| |
| |
| |
| |
| As of December 31, 2021 |
| For the year ended December 31, 2021 | |||||||||||||
Assets | Liabilities | Other | ||||||||||||||
comprehensive | Comprehensive | |||||||||||||||
Joint Venture |
| Current |
| Non-current |
| Current |
| Non-current |
| Revenue |
| Net income (loss) |
| income |
| income |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
SQM Vitas Fzco. |
| |
| — |
| |
| |
| |
| |
| |
| |
SQM Vitas Brasil Agroindustria |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM Vitas Perú S.A.C. |
| |
| |
| |
| |
| |
| |
| |
| |
Pavoni & C. Spa |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Covalent Lithium Pty Ltd. |
| |
| |
| |
| |
| |
| ( |
| |
| ( |
Total |
| |
| |
| |
| |
| |
| |
| ( |
| |
| As of December 31, 2020 |
| For the year ended December 31, 2020 | |||||||||||||
Assets | Liabilities | Other | ||||||||||||||
comprehensive | Comprehensive | |||||||||||||||
Joint Venture |
| Current |
| Non-current |
| Current |
| Non-current |
| Revenue |
| Net income (loss) |
| income |
| income |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
Sichuan SQM Migao Chemical Fertilizers Co Ltd. | | | | — | ( | — | ( | |||||||||
SQM Vitas Fzco. |
| ( |
| |
| |
| — |
| — |
| |
| — |
| |
SQM Vitas Brasil Agroindustria |
| |
| |
| |
| — |
| |
| |
| ( |
| ( |
SQM Vitas Perú S.A.C. |
| |
| |
| |
| |
| |
| |
| — |
| |
Pavoni & C. Spa |
| |
| |
| |
| |
| |
| |
| |
| |
Covalent Lithium Pty Ltd. |
| |
| |
| |
| |
| — |
| ( |
| |
| ( |
Total |
| |
| |
| |
| |
| |
| |
| ( |
| |
8.3Other joint venture disclosures
| Cash and cash equivalents |
| Other current financial liabilities |
| Other non-current financial liabilities | |||||||
As of | As of | As of | As of | As of | As of | |||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||
Joint Venture |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
SQM Vitas Fzco. |
| |
| |
| |
| |
| |
| |
SQM Vitas Brasil Agroindustria |
| |
| |
| |
| |
| |
| |
SQM Vitas Perú S.A.C. |
| |
| |
| |
| |
| |
| |
Pavoni & C. Spa |
| |
| |
| |
| |
| |
| |
Covalent Lithium Pty Ltd. |
| |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
| |
| |
F-51
| Depreciation and amortization expense |
| Interest expense |
| Income tax benefit (expense) | |||||||
for the year ending | for the year ending | for the year ending | ||||||||||
As of | As of | As of | As of | As of | As of | |||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | |||||||
Joint Venture |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
SQM Vitas Fzco. |
| |
| — |
| ( |
| ( |
| |
| |
SQM Vitas Brasil Agroindustria |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
SQM Vitas Perú S.A.C. |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
Pavoni & C. Spa |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
Covalent Lithium Pty Ltd. |
| ( |
| ( |
| ( |
| ( |
| |
| |
Total |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
8.4Disclosure of interests in joint ventures
a) | Transactions in the year 2022 |
● | As of December 31, 2022, there are no transactions to disclose. |
b) | Transactions in the year 2021 |
● | On February 9, 2021, two of the Company’s subsidiaries signed an agreement to terminate a dispute related to sales contracts and interest in the joint venture of Sichuan SQM Migao Chemical Fertilizers Co Ltd. Consequently, the Company received a US$ |
c) | Transactions in the year 2020 |
● | SQM Vitas BV became a wholly owned subsidiary of the Company during the second quarter of 2020, through its subsidiary Soquimich European Holdings, at a cost of ThUS$ |
● | In the second quarter of 2020, shares held in Arpa Speciali S.R.L. were sold through SQM Pavoni & C., SpA. At a value of ThUS$ |
● | In the third quarter of 2020, shares held in Coromandel SQM India were sold through Soquimich European Holdings B.V. at a value of ThUS$ |
● | During fourth quarter of 2020, the shares in SQM Qingdao-Star Co, Ltd. were sold through SQM Industrial S.A. for ThUS$ |
● | A gain amounting ThUS$ |
8.5Joint Operations
In 2017, together with our subsidiary SQM Australia Pty, we entered into an agreement to acquire
On February 17, 2021, the Board of Directors approved the investment in the Mount Holland lithium project in Western Australia. SQM's share of the project investment is expected to be approximately US$
F-52
2025. The feasibility study confirms an expected initial production capacity of
As of December 31, 2022, a total of US$
Note 9Cash and cash equivalents
9.1Types of cash and cash equivalents
As of December 31, 2022 and 2021, cash and cash equivalents are detailed as follows:
| As of |
| As of | |
December 31, | December 31, | |||
Cash | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Cash on hand | | | ||
Cash in banks |
| |
| |
Total Cash | | |
| As of |
| As of | |
December 31, | December 31, | |||
Cash equivalents | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Short-term deposits, classified as cash equivalents | ||||
Short-term investments, classified as cash equivalents | ||||
Total cash equivalents |
| |
| |
Total cash and cash equivalents |
| |
| |
9.2Short-term investments, classified as cash equivalents
As of December 31, 2022 and 2021, the short-term investments classified as cash equivalents relate to mutual funds (investment liquidity funds) for investments in:
| As of |
| As of | |
December 31, | December 31, | |||
Institution | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Legg Mason - Western Asset Institutional Cash Reserves | ||||
JP Morgan US dollar Liquidity Fund Institutional | ||||
Total |
| |
| |
Short-term investments are highly liquid mutual funds that are basically invested in short-term fixed rate notes in the U.S. market.
9.3Amount restricted cash balances
The Company has granted a guarantee consisting of financial instruments, specified in deposits, custody and administration to Banco de Chile, for its subsidiary Isapre Norte Grande Ltda., in compliance with the provisions of the Superintendence of Health, which regulates social security health institutions.
According to the regulations of the Superintendence of Health, this guarantee is for the total payable to its affiliates and medical providers. Banco de Chile reports the current value of the guarantee to the Superintendence of Health and Isapre Norte Grande Ltda. on a daily basis.
F-53
As of December 31, 2022 and 2021, pledged assets are as follows
| As of |
| As of | |
| December 31, |
| December 31, | |
Restricted cash balances |
| 2022 |
| 2021 |
| ThUS$ |
| ThUS$ | |
Isapre Norte Grande Ltda. |
| |
| |
Total |
| |
| |
9.4Short-term deposits, classified as cash equivalents
The detail at the end of each balance date is as follows:
| Original |
|
| Interest |
| As of | ||||||||||
Receiver of the deposit |
| Type of deposit |
| Currency |
| Interest Rate |
| Placement date |
| Expiration date |
| Principal |
| accrued to-date |
| December 31, 2022 |
| ThUS$ |
| ThUS$ |
| ThUS$ | |||||||||||
Banco Crédito e Inversiones |
| Fixed term |
| Peso |
| | % | 11-17-2022 |
| 01-25-2023 |
| |
| |
| |
Banco Crédito e Inversiones |
| Fixed term |
| Peso |
| | % | 12-15-2022 |
| 01-25-2023 |
| |
| |
| |
Itau Corpbanca |
| Fixed term |
| Peso |
| | % | 12-06-2022 |
| 01-05-2023 |
| |
| |
| |
Itau Corpbanca |
| Fixed term |
| Peso |
| | % | 12-12-2022 |
| 01-25-2023 |
| |
| |
| |
Itau Corpbanca |
| Fixed term |
| Peso |
| | % | 11-17-2022 |
| 01-25-2023 |
| |
| |
| |
Itau Corpbanca |
| Fixed term |
| Peso |
| | % | 11-16-2022 |
| 01-25-2023 |
| |
| |
| |
Itau Corpbanca |
| Fixed term |
| Peso |
| | % | 12-13-2022 |
| 01-25-2023 |
| |
| |
| |
Santander |
| Fixed term |
| Peso |
| | % | 12-16-2022 |
| 01-25-2023 |
| |
| |
| |
Santander |
| Fixed term |
| Peso |
| | % | 12-06-2022 |
| 01-05-2023 |
| |
| |
| |
Scotiabank Sud Americano |
| Fixed term |
| Peso |
| | % | 12-12-2022 |
| 01-25-2023 |
| |
| |
| |
Scotiabank Sud Americano |
| Fixed term |
| Peso |
| | % | 12-13-2022 |
| 01-25-2023 |
| |
| |
| |
Scotiabank Sud Americano |
| Fixed term |
| Peso |
| | % | 12-13-2022 |
| 01-25-2023 |
| |
| |
| |
Scotiabank Sud Americano |
| Fixed term |
| Peso |
| | % | 12-14-2022 |
| 01-25-2023 |
| |
| |
| |
Scotiabank Sud Americano | Fixed term | Dollar | | % | 11-21-2022 | 01-25-2023 | | | | |||||||
Sumitomo Mitsui Banking | Fixed term | Dollar | | % | 11-21-2022 | 01-25-2023 | | | | |||||||
Banco Crédito e Inversiones | Fixed term | Dollar | | % | 12-06-2022 | 01-06-2023 | | | | |||||||
Banco Crédito e Inversiones | Fixed term | Dollar | | % | 12-01-2022 | 01-03-2023 | | | | |||||||
Banco Crédito e Inversiones | Fixed term | Peso | | % | 12-30-2022 | 01-06-2023 | | | | |||||||
Banco de Chile | Fixed term | Dollar | | % | 12-12-2022 | 02-14-2023 | | | | |||||||
Itau Corpbanca | Fixed term | Dollar | | % | 12-13-2022 | 02-16-2023 | | | | |||||||
Itau Corpbanca | Fixed term | Dollar | | % | 11-30-2022 | 01-03-2023 | | | | |||||||
Itau Corpbanca | Fixed term | Dollar | | % | 12-06-2022 | 01-06-2023 | | | | |||||||
Itau Corpbanca | Fixed term | Dollar | | % | 12-21-2022 | 02-27-2023 | | | | |||||||
Scotiabank Sud Americano | Fixed term | Dollar | | % | 12-07-2022 | 01-27-2023 | | | | |||||||
Scotiabank Sud Americano | Fixed term | Dollar | | % | 11-16-2022 | 01-03-2023 | | | | |||||||
Scotiabank Sud Americano | Fixed term | Dollar | | % | 12-28-2022 | 02-13-2023 | | | | |||||||
Scotiabank Sud Americano | Fixed term | Dollar | | % | 12-30-2022 | 03-03-2023 | | — | | |||||||
Scotiabank Sud Americano | Fixed term | Dollar | | % | 11-22-2022 | 01-03-2023 | | | | |||||||
Scotiabank Sud Americano | Fixed term | Dollar | | % | 12-16-2022 | 01-13-2023 | | | | |||||||
Scotiabank Sud Americano | Fixed term | Dollar | | % | 12-22-2022 | 02-16-2023 | | | | |||||||
Total |
|
|
|
|
|
|
|
|
|
|
| |
| |
| |
F-54
|
|
|
|
|
|
|
| As of | ||||||||
Original | Interest | December 31, | ||||||||||||||
Receiver of the deposit |
| Type of deposit |
| Currency |
| Interest Rate |
| Placement date |
| Expiration date |
| Principal |
| accrued to-date |
| 2021 |
| ThUS$ | ThUS$ | ThUS$ | |||||||||||||
Credit Suisse |
| Fixed term |
| Dollar |
| | % | 11-30-2021 |
| 02-28-2022 |
| |
| |
| |
Banco BCI |
| Fixed term |
| Dollar |
| | % | 12-24-2021 |
| 02-28-2022 |
| |
| — |
| |
Banco BCI |
| Fixed term |
| Dollar |
| | % | 12-07-2021 |
| 01-14-2022 |
| |
| |
| |
Banco BCI |
| Fixed term |
| Dollar |
| | % | 12-30-2021 |
| 01-14-2022 |
| |
| — |
| |
Banco Santander |
| Fixed term |
| Dollar |
| | % | 12-30-2021 |
| 01-06-2022 |
| |
| |
| |
Banco Santander |
| Fixed term |
| Dollar |
| | % | 12-16-2021 |
| 01-31-2022 |
| |
| — |
| |
Banco Santander |
| Fixed term |
| Dollar |
| | % | 12-27-2021 |
| 03-04-2022 |
| |
| — |
| |
Banco Santander |
| Fixed term |
| Dollar |
| | % | 12-29-2021 |
| 01-27-2022 |
| |
| — |
| |
Banco Itaú Corpbanca |
| Fixed term |
| Dollar |
| | % | 12-14-2021 |
| 01-07-2022 |
| |
| |
| |
Banco Itaú Corpbanca |
| Fixed term |
| Dollar |
| | % | 12-28-2021 |
| 01-24-2022 |
| |
| — |
| |
Banco Itaú Corpbanca |
| Fixed term |
| Dollar |
| | % | 12-07-2021 |
| 01-28-2022 |
| |
| — |
| |
Scotiabank Sud Americano |
| Fixed term |
| Dollar |
| | % | 12-24-2021 |
| 02-28-2022 |
| |
| — |
| |
Scotiabank Sud Americano |
| Fixed term |
| Dollar |
| | % | 12-17-2021 |
| 01-31-2022 |
| |
| — |
| |
Scotiabank Sud Americano |
| Fixed term |
| Dollar |
| | % | 12-03-2021 |
| 01-18-2022 |
| |
| — |
| |
Total |
|
|
|
|
|
|
|
|
|
|
| |
| |
| |
F-55
Note 10Inventories
| As of |
| As of | |
| December 31, |
| December 31, | |
Type of inventory |
| 2022 |
| 2021 |
| ThUS$ |
| ThUS$ | |
Raw material |
| |
| |
Production supplies |
| |
| |
Products-in-progress |
| |
| |
Finished product |
| |
| |
Total |
| |
| |
As of December 31, 2022 and 2021, the Company held caliche stockpiles, solutions in solar ponds and intermediary salts amounting ThUS$
As of December 31, 2022, bulk inventories recognized within finished goods were ThUS$
As of December 31, 2022 and 2021, recognized inventory allowances, amounted to ThUS$
For raw materials, supplies, materials and parts, the lower value provision was associated to the proportion of defective materials and potential differences.
The breakdown of inventory allowances is detailed as follows:
| As of |
| As of | |
| December 31, |
| December 31, | |
Type of inventory |
| 2022 |
| 2021 |
| ThUS$ |
| ThUS$ | |
Raw material and supplies for production |
| |
| |
Products-in-progress |
| |
| |
Finished product |
| |
| |
Total |
| |
| |
The Company has not pledged inventory as collateral for the periods indicated above.
F-56
As of December 31, 2022, and 2021, movements in provisions are detailed as follows:
| As of |
| As of |
| As of | |
| December 31, |
| December 31, |
| December 31, | |
Reconciliation |
| 2022 |
| 2021 |
| 2020 |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Beginning balance |
| |
| |
| |
Increase in Lower Value (1) |
| |
| ( |
| ( |
Additional Provision Differences of Inventory (2) |
| ( |
| |
| ( |
Increase / Decrease eventual differences and others (3) |
| — |
| — |
| |
Provision Used |
| ( |
| ( |
| ( |
Total changes |
| |
| ( |
| ( |
Final balance |
| |
| |
| |
(1) | There are three types of Lower Value Provisions: (a) Economic Realizable Lower Value, (b) Potential Inventory with Uncertain Future Use and (c) Reprocessing Costs of Off-Specification Products. |
(2) | Provisions for Inventory Differences generated when physical differences are detected when taking inventory, which exceed the tolerance levels for this process. |
(3) | This algorithm corresponds to the provision of diverse percentages based on the complexity in the measurement and rotation of stock, as well as standard differences based on previous results, as is the case with provisions relating to Commercial Offices. |
Note 11Related party disclosures
11.1Related party disclosures
Balances pending at period-end are not guaranteed, accrue no interest and are settled in cash, no guarantees have been delivered or received for trade and other receivables due from related parties or trade and other payables due to related parties.
11.2Relationships between the parent and the entity
Pursuant to Article 99 of Law of the Securities Market Law, the CMF may determine that a company does not have a controlling entity in accordance with the distribution and dispersion of its ownership. On November 30, 2018, the CMF issued the ordinary letter No. 32,131 whereby it determined that Pampa Group, do not exert decisive power over the management of the Company since it does not have a predominance in the ownership that allows it to make management decisions. Therefore, the CMF has determined not to consider Pampa Group as the controlling entity of the Company and that the Company does not have a controlling entity given its current ownership structure.
F-57
11.3Detailed identification of related parties and subsidiaries
As of December 31, 2022 and 2021, the detail of entities that are identified as subsidiaries or related parties of the SQM Group is as follows:
Tax ID No |
| Name |
| Country of origin |
| Functional currency |
| Nature |
Foreign |
| Nitratos Naturais Do Chile Ltda. |
| Brazil |
| Dollar |
| Subsidiary |
Foreign |
| SQM North America Corp. |
| United States |
| Dollar |
| Subsidiary |
Foreign |
| SQM Europe N.V. |
| Belgium |
| Dollar |
| Subsidiary |
Foreign |
| Soquimich European Holding B.V. |
| Netherlands |
| Dollar |
| Subsidiary |
Foreign |
| SQM Corporation N.V. |
| Curacao |
| Dollar |
| Subsidiary |
Foreign |
| SQM Comercial De México S.A. de C.V. |
| Mexico |
| Dollar |
| Subsidiary |
Foreign |
| North American Trading Company |
| United States |
| Dollar |
| Subsidiary |
Foreign |
| Administración y Servicios Santiago S.A. de C.V. |
| Mexico |
| Dollar |
| Subsidiary |
Foreign |
| SQM Perú S.A. (3) |
| Peru |
| Dollar |
| Subsidiary |
Foreign |
| SQM Ecuador S.A. |
| Ecuador |
| Dollar |
| Subsidiary |
Foreign |
| SQM Nitratos Mexico S.A. de C.V. |
| Mexico |
| Dollar |
| Subsidiary |
Foreign |
| SQMC Holding Corporation L.L.P. |
| United States |
| Dollar |
| Subsidiary |
Foreign |
| SQM Investment Corporation N.V. |
| Curacao |
| Dollar |
| Subsidiary |
Foreign |
| SQM Brasil Limitada |
| Brazil |
| Dollar |
| Subsidiary |
Foreign |
| SQM France S.A. |
| France |
| Dollar |
| Subsidiary |
Foreign |
| SQM Japan Co. Ltd. |
| Japan |
| Dollar |
| Subsidiary |
Foreign |
| Royal Seed Trading Corporation A.V.V. |
| Aruba |
| Dollar |
| Subsidiary |
Foreign |
| SQM Oceania Pty Limited |
| Australia |
| Dollar |
| Subsidiary |
Foreign |
| Rs Agro-Chemical Trading Corporation A.V.V. |
| Aruba |
| Dollar |
| Subsidiary |
Foreign |
| SQM Indonesia S.A. |
| Indonesia |
| Dollar |
| Subsidiary |
Foreign |
| SQM Virginia L.L.C. |
| United States |
| Dollar |
| Subsidiary |
Foreign |
| Comercial Caimán Internacional S.A. |
| Panama |
| Dollar |
| Subsidiary |
Foreign |
| SQM África Pty. Ltd. |
| South Africa |
| Dollar |
| Subsidiary |
Foreign |
| SQM Colombia SAS |
| Colombia |
| Dollar |
| Subsidiary |
Foreign |
| SQM Internacional N.V. |
| Belgium |
| Dollar |
| Subsidiary |
Foreign |
| SQM -Shanghai Chemicals Co. Ltd. |
| China |
| Dollar |
| Subsidiary |
Foreign |
| SQM Lithium Specialties LLC |
| United States |
| Dollar |
| Subsidiary |
Foreign |
| SQM Iberian S.A. |
| Spain |
| Dollar |
| Subsidiary |
Foreign |
| SQM Beijing Commercial Co. Ltd. |
| China |
| Dollar |
| Subsidiary |
Foreign |
| SQM Thailand Limited |
| Thailand |
| Dollar |
| Subsidiary |
Foreign |
| SQM Australia PTY |
| Australia |
| Dollar |
| Subsidiary |
Foreign |
| SQM Holland B.V. |
| Netherlands |
| Dollar |
| Subsidiary |
Foreign |
| SQM Korea LLC |
| Korea |
| Dollar |
| Subsidiary |
96.801.610-5 |
| Comercial Hydro S.A. |
| Chile |
| Dollar |
| Subsidiary |
96.651.060-9 |
| SQM Potasio S.A. |
| Chile |
| Dollar |
| Subsidiary |
96.592.190-7 |
| SQM Nitratos S.A. |
| Chile |
| Dollar |
| Subsidiary |
96.592.180-K |
| Ajay SQM Chile S.A. |
| Chile |
| Dollar |
| Subsidiary |
79.947.100-0 |
| SQM Industrial S.A. |
| Chile |
| Dollar |
| Subsidiary |
79.906.120-1 |
| Isapre Norte Grande Ltda. |
| Chile |
| Peso |
| Subsidiary |
79.876.080-7 |
| Almacenes y Depósitos Ltda. |
| Chile |
| Peso |
| Subsidiary |
F-58
Tax ID No |
| Name |
| Country of origin |
| Functional currency |
| Nature |
79.770.780-5 |
| Servicios Integrales de Tránsitos y Transferencias S.A. |
| Chile |
| Dollar |
| Subsidiary |
79.768.170-9 |
| Soquimich Comercial S.A. |
| Chile |
| Dollar |
| Subsidiary |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| Dollar |
| Subsidiary |
76.534.490-5 |
| Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. |
| Chile |
| Peso |
| Subsidiary |
76.425.380-9 |
| Exploraciones Mineras S.A. |
| Chile |
| Dollar |
| Subsidiary |
76.064.419-6 |
| Comercial Agrorama Ltda. |
| Chile |
| Peso |
| Subsidiary |
76.145.229-0 |
| Agrorama S.A. |
| Chile |
| Peso |
| Subsidiary |
76.359.919-1 |
| Orcoma Estudios SPA |
| Chile |
| Dollar |
| Subsidiary |
76.360.575-2 |
| Orcoma SPA |
| Chile |
| Dollar |
| Subsidiary |
76.686.311-9 |
| SQM MaG SpA |
| Chile |
| Dollar |
| Subsidiary |
77.114.779-8 |
| Sociedad Contractual Minera Bufalo |
| Chile |
| Dollar |
| Subsidiary |
Foreign |
| Abu Dhabi Fertilizer Industries WWL |
| United Arab Emirates |
| Arab Emirates dirham |
| Associate |
Foreign |
| Ajay North America |
| United States |
| Dollar |
| Associate |
Foreign |
| Ajay Europe SARL |
| France |
| Euro |
| Associate |
Foreign |
| Kore Potash PLC |
| United Kingdom |
| Dollar |
| Associate |
Foreign |
| SQM Vitas Fzco. |
| United Arab Emirates |
| Arab Emirates dirham |
| Joint venture |
Foreign |
| Covalent Lithium Pty Ltd. |
| Australia |
| Dollar |
| Joint venture |
Foreign |
| Pavoni & C, SPA |
| Italy |
| Euro |
| Joint venture |
96.511.530-7 |
| Sociedad de Inversiones Pampa Calichera |
| Chile |
| Dollar |
| Other related parties |
96.529.340-K |
| Norte Grande S.A. |
| Chile |
| Peso |
| Other related parties |
79.049.778-9 |
| Callegari Agrícola S.A. |
| Chile |
| Peso |
| Other related parties |
Foreign |
| SQM Vitas Brasil Agroindustria (1) |
| Brazil |
| Brazilian real |
| Other related parties |
Foreign |
| SQM Vitas Perú S.A.C. (1) |
| Peru |
| Dollar |
| Other related parties |
Foreign |
| Abu Dhabi Fertilizer Industries WWL (2) |
| United Arab Emirates |
| United Arab Emirates dirham |
| Other related parties |
Foreign |
| International Technical and Trading Agencies CO WLL (2) |
| United Arab Emirates |
| United Arab Emirates dirham |
| Other related parties |
(1) | These Companies are subsidiaries of the joint venture SQM Vitas Fzco. |
(2) | These Companies are subsidiaries of the joint venture Abu Dhabi Fertilizer Industries WWL Ltda. and therefore it consolidates them and presents all their assets and liabilities. |
(3) | This company was liquidated in December 2022. |
The following entity was considered related party as of December 31, 2021: Sichuan SQM Migao Chemical Fertilizers Co Ltd. The following entities were considered related parties as of December 31, 2020 (see Note 7.3 letter c and Note 8.4 letter b): SQI Corporation N.V., SQM Italia SRL, Doktor Tarsa Tarim, SQM Eastmed Turkey, Terra Tarsa Ukraine LLC, Terra Tarsa B.V., Plantacote N.V., Terra Tarsa Don LLC, Doktolab Tarim Arastirma San., Doctochem Tarim Sanayi Ticaret Ltd. STI, Coromandel SQM India Sichuan SQM Migao Chemical Fertilizers Co Ltd. and Arpa Speciali S.R.L.
F-59
The following other related parties correspond to mining contractual corporations.
Tax ID No. |
| Name |
| Country of origin |
| Functional currency |
| Relationship |
N/A |
| Ara Dos Primera del Salar de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Ara Tres Primera del Salar de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Ara Cuatro Primera del Salar de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Ara Cinco Primera del Salar de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Curicó Dos Primera del Salar de Pampa Alta, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Curicó Tres Primera del Sector de Pampa Alta, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Evelyn Veinticuatro Primera de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Filomena Tres Primera de Oficina Filomena, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Filomena Cuatro Primera de Oficina Filomena, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Francis Cuatro Primera de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Francis Cuatro Segunda del Salar de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Francis Cuatro Tercera de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Francis Cuatro Cuarta de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Francis Cuatro Quinta de Pampa Blanca, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Francis Primera del Salar de Pampa Blanca de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Francis Segunda del Salar de Pampa Blanca de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Francis Tercera del Salar de Pampa Blanca de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Ivon Primera de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Ivon Décima Segunda de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Ivon Sexta de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Julia Primera de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Lorena Trigésimo Quinta de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Perseverancia Primera de Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Tamara 40 Primera del Sector S.E. OF. Concepción, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Tamara Tercera de Oficina Concepción, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
N/A |
| Tamara 4 Segunda del Sector S.E. OF Concepción, Sierra Gorda |
| Chile |
| Peso |
| Other related parties |
Below is a list of transactions with clients and suppliers with whom a relationship with key Company personnel was identified:
Tax ID No |
| Name |
| Country of origin |
| Nature |
76.389.727-3 |
| Sociedad Periodística El Libero |
| Chile |
| Other related parties |
90.193.000-7 |
| El Mercurio S.A.P. |
| Chile |
| Other related parties |
92.580.000-7 |
| Empresa Nacional de Telecomunicaciones S.A. |
| Chile |
| Other related parties |
96.806.980-2 |
| Entel PCS Telecomunicaciones S.A. |
| Chile |
| Other related parties |
97.004.000-5 |
| Banco de Chile |
| Chile |
| Other related parties |
99.012.000-5 |
| Compañía de Seguros de Vida Consorcio Nacional |
| Chile |
| Other related parties |
10.581.580-8 |
| Gonzalo Guerrero Yamamoto |
| Chile |
| Other related parties |
96.529.340-K |
| Norte Grande S.A. |
| Chile |
| Other related parties |
65.204.189-2 | Fundación para el desarrollo social | Chile |
| Other related parties | ||
82.135.600-8 | Instituto Chileno administración empresas | Chile | Other related parties |
F-60
11.4Detail of related parties and related party transactions
Transactions between the Company and its subsidiaries, associated businesses, joint ventures and other related parties are part of the Company’s common transactions. Their conditions are those customary for this type of transactions in respect of terms and market prices. Maturity terms for each case vary by virtue of the transaction giving rise to them.
For the year ended December 31, 2022, 2021 and 2020, the detail of significant transactions with related parties is as follows
For the year ended | For the year ended | For the year ended | ||||||||||||
December | December | December | ||||||||||||
Tax ID No |
| Name |
| Nature |
| Country of origin |
| Transaction |
| 31, 2022 |
| 31, 2021 |
| 31, 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||||||||||
Foreign |
| Doktor Tarsa Tarim Sanayi AS |
| Associate |
| Turkey |
| Sale of products |
| — |
| — |
| |
Foreign |
| Ajay Europe S.A.R.L. |
| Associate |
| France |
| Sale of products |
| |
| |
| |
Foreign |
| Ajay Europe S.A.R.L. |
| Associate |
| France |
| Dividends |
| |
| |
| |
Foreign |
| Ajay North America LL.C. |
| Associate |
| United States |
| Sale of products |
| |
| |
| |
Foreign |
| Ajay North America LL.C. |
| Associate |
| United States |
| Dividends |
| |
| |
| |
Foreign |
| Abu Dhabi Fertilizer Industries WWL |
| Associate |
| United Arab Emirates |
| Dividends |
| |
| |
| — |
Foreign |
| Abu Dhabi Fertilizer Industries WWL |
| Associate |
| United Arab Emirates |
| Sale of products |
| — |
| — |
| — |
Foreign |
| SQM Vitas Brasil Agroindustria |
| Other related parties |
| Brazil |
| Sale of products |
| |
| |
| |
Foreign |
| SQM Vitas Perú S.A.C. |
| Other related parties |
| Perú |
| Sale of products |
| |
| |
| |
Foreign |
| Coromandel SQM India |
| Joint venture |
| India |
| Sale of products |
| — |
| |
| |
Foreign |
| SQM Star Qingdao Corp Nutrition Co., Ltd. |
| Joint venture |
| China |
| Dividends |
| — |
| — |
| |
Foreign |
| SQM Star Qingdao Corp Nutrition Co., Ltd. |
| Joint venture |
| China |
| Sale of products |
| — |
| — |
| — |
Foreign |
| Terra Tarsa Ukraine LLC |
| Other related parties |
| Ukraine |
| Sale of products |
| — |
| — |
| |
Foreign |
| Pavoni & CPA |
| Joint venture |
| Italy |
| Sale of products |
| |
| |
| |
Foreign |
| Plantacote NV |
| Other related parties |
| Belgium |
| Sale of products |
| — |
| — |
| — |
Foreign |
| Arpa Speciali S.R.L. |
| Other related parties |
| Italy |
| Sale of products |
| — |
| — |
| — |
Foreign |
| Terra Tarsa Don LLC |
| Other related parties |
| Russian Federation |
| Sale of products |
| — |
| — |
| — |
Foreign |
| SQM Eastmed Turkey |
| Associate |
| Turkey |
| Sale of products |
| — |
| — |
| — |
Chile |
| Banco de Chile |
| Other related parties |
| Chile |
| Service Provider |
| ( |
| ( |
| — |
Chile |
| Norte Grande S.A. |
| Other related parties |
| Chile |
| Client |
| |
| |
| — |
Chile |
| El Mercurio S.A.P. |
| Other related parties |
| Chile |
| Service Provider |
| ( |
| ( |
| — |
Chile |
| Compañía de Seguros de Vida Consorcio Nacional |
| Other related parties |
| Chile |
| Service Provider |
| ( |
| ( |
| — |
Chile |
| Entel PCS Telecomunicaciones S.A. |
| Other related parties |
| Chile |
| Service Provider |
| ( |
| ( |
| — |
Chile |
| Empresa Nacional de Telecomunicaciones |
| Other related parties |
| Chile |
| Service Provider |
| ( |
| ( |
| — |
Chile | Gonzalo Guerrero Yamamoto | Other related parties | Chile | Service Provider | ( | ( | — | |||||||
Chile | Instituto Chileno administración empresas | Other related parties | Chile | Service Provider | ( | — | — | |||||||
Chile | Fundación para el desarrollo social | Other related parties | Chile | Service Provider | ( | — | — |
F-61
11.5Trade receivables due from related parties, current:
As of | As of | |||||||||||
December 31, | December 31, | |||||||||||
Tax ID No |
| Name |
| Nature |
| Country of origin |
| Currency |
| 2022 |
| 2021 |
ThUS$ | ThUS$ | |||||||||||
Foreign | Ajay Europe S.A. R.L. | Associate | France | Euro | | | ||||||
Foreign | Ajay North America LLC. | Associate | United States of America | Dollar | | | ||||||
Foreign |
| Abu Dhabi Fertilizer Industries WWL |
| Associate |
| United Arab Emirates |
| United Arab Emirates Dirham |
| — |
| |
96.511.530-7 |
| Soc. de Inversiones Pampa Calichera |
| Other related parties |
| Chile |
| Dollar |
| |
| |
Foreign |
| SQM Vitas Brasil Agroindustria |
| Other related parties |
| Brazil |
| Dollar |
| |
| |
Foreign |
| SQM Vitas Perú S.A.C. |
| Other related parties |
| Peru |
| Dollar |
| |
| |
Foreign |
| SQM Vitas Fzco. |
| Joint venture |
| United Arab Emirates |
| United Arab Emirates Dirham |
| |
| |
Foreign |
| Pavoni & C SpA |
| Joint venture |
| Italy |
| Euro |
| |
| |
Foreign |
| Covalent Lithium Pty Ltd. |
| Joint venture |
| Australia |
| Australian dollar |
| |
| |
Total |
|
|
|
|
|
| |
| |
As of December 31, 2022 and 2021, receivables are net of provision for ThUS$
11.6Other disclosures:
Note 6 describes the remuneration of the board of directors, administration and key management personnel.
F-62
Note 12 Financial instruments
12.1Types of other current and non-current financial assets
| As of |
| As of | |
December 31, | December 31, | |||
Description of other financial assets | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Financial assets at amortized cost (1) | | | ||
Derivative financial instruments |
|
| ||
- For hedging |
| |
| |
- Non-hedging (2) |
| |
| |
Total other current financial assets |
| |
| |
Financial assets at fair value through other comprehensive income (4) (5) |
| |
| |
Derivative financial instruments |
|
|
|
|
- For hedging |
| |
| |
Other financial assets at amortized cost |
| |
| |
Total other non-current financial assets |
| |
| |
| As of |
| As of | |
December 31, | December 31, | |||
Institution | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Banco de Crédito e Inversiones | | | ||
Banco Santander (3) | | | ||
Banco Itaú CorpBanca |
| |
| |
Banco Estado | | | ||
Banco de Chile |
| |
| |
Scotiabank Sud Americano |
| |
| |
Sumitomo Mitsui Banking |
| |
| |
Total |
| |
| |
(1) | Corresponds to term deposits whose maturity date is greater than 90 days and less than 360 days from the investment date constituted in the aforementioned financial institutions. |
(2) | Correspond to forwards and options that were not classified as hedging instruments (See detail in Note 12.3). |
(3) | As of December 31, 2022, no margin calls were recorded. As of December 31, 2021, margin calls were recorded for US$ |
(4) | During the first quarter of 2021, equity instruments classified at fair value irrevocably through other comprehensive income were sold for US$ |
(5) | During the second quarter of 2021, as a result of the loss of significant influence over the investment of Kore Potash (for more details, see Note 7.3 letter b), the investment, which was previous recognized as an investment in associates, was reclassified as other non-current financial assets as it was classified as financial equity instrument at fair value through other comprehensive income irrevocably. |
F-63
12.2Trade and other receivables
As of December 31, 2022 | As of December 31, 2021 | |||||||||||
Trade and other receivables |
| Current |
| Non-current |
| Total |
| Current |
| Non-current |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Trade receivables, current |
| |
| |
| |
| |
| |
| |
Prepayments, current |
| |
| |
| |
| |
| |
| |
Other receivables, current |
| |
| |
| |
| |
| |
| |
Guarantee deposits (1) | | | | | | | ||||||
Total trade and other receivables |
| |
| |
| |
| |
| |
| |
See discussion about credit risk in Note 4.2.
As of December 31, 2022 |
| As of December 31, 2021 | ||||||||||
Impairment | Impairment | |||||||||||
Gross | provision for | Trade receivables, | Gross | provision for | Trade receivables, | |||||||
Trade and other receivables |
| receivables |
| doubtful receivables |
| net |
| receivables |
| doubtful receivables |
| net |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Receivables related to credit operations, current | | ( | | | ( | | ||||||
Prepayments, current | | ( | | | ( | | ||||||
Other receivables, current |
| |
| ( |
| |
| |
| ( |
| |
Guarantee deposits (1) | | | | | | | ||||||
Other receivables, non-current |
| |
| |
| |
| |
| |
| |
Total trade and other receivables |
| |
| ( |
| |
| |
| ( |
| |
(1) During the third quarter of 2022, the Company signed an agreement for an option to potentially acquire a battery-grade lithium hydroxide monohydrate plant with a production capacity of approximately
The acquisition cost totals CNY
F-64
(a)Renegotiated portfolio
As of December 31, 2022, and 2021 the detail of the renegotiated portfolio is as follows:
As of December 31, 2022 | ||||||||
Portfolio analysis | ||||||||
Number of customers with | Gross non-renegotiated | Number of customers with | Gross renegotiated | |||||
Past due segments |
| non-renegotiated portfolio |
| portfolio ThUS$ |
| renegotiated portfolio |
| portfolio ThUS$ |
Current | | | | | ||||
1 - 30 days |
| |
| |
| |
| |
31 - 60 days |
| |
| |
| |
| |
61 - 90 days |
| |
| |
| |
| |
91 - 120 days |
| |
| |
| |
| |
121 - 150 days |
| |
| |
| |
| |
151 - 180 days |
| |
| |
| |
| |
181 - 210 days |
| |
| |
| |
| |
211 - 250 days |
| |
| |
| |
| |
>250 days |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
As of December 31, 2021 | ||||||||
Portfolio analysis | ||||||||
non-renegotiated portfolio | Gross non-renegotiated | Number of customers with | Gross renegotiated | |||||
Past due segments |
| Number of customers with |
| portfolio ThUS$ |
| renegotiated portfolio |
| portfolio ThUS$ |
Current | | | | | ||||
1 - 30 days |
| |
| |
| |
| |
31 - 60 days |
| |
| |
| |
| |
61 - 90 days |
| |
| |
| |
| |
91 - 120 days |
| |
| |
| |
| |
121 - 150 days |
| |
| |
| |
| |
151 - 180 days |
| |
| |
| |
| |
181 - 210 days |
| |
| |
| |
| |
211 - 250 days |
| |
| |
| |
| |
>250 days |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
F-65
(b) | Impairment provision for doubtful receivables |
As of December 31, 2022 | ||||||||||||||
Trade accounts receivable days past due | ||||||||||||||
Trade receivables | ||||||||||||||
due from related | ||||||||||||||
Trade and other receivables |
| Current |
| 1 to 30 days |
| 31 to 60 days |
| 61 to 90 days |
| Over 90 days |
| Trade |
| parties |
ThUS$ | ThUS$ | |||||||||||||
Expected Loss Rate on | — | % | | % | | % | | % | | % | — | — | ||
Total Gross Book Value | | | | | | | | |||||||
Impairment Estimate |
| |
| |
| |
| |
| |
| |
| |
As of December 31, 2021 | ||||||||||||||
Trade accounts receivable days past due | Trade receivables | |||||||||||||
|
|
|
| 61 to 90 |
| Over 90 |
|
| due from related | |||||
Trade and other receivables | Current | 1 to 30 days | 31 to 60 days |
| days |
| days | Trade | parties | |||||
ThUS$ | ThUS$ | |||||||||||||
Expected Loss Rate on |
| | % | | % | | % | | % | | % | — | — | |
Total Gross Book Value |
| | | | | | | | ||||||
Impairment Estimate |
| |
| |
| |
| |
| |
| |
| |
As of December 31, 2022, and 2021, movements in provisions are as follows:
| As of |
| As of | |
December 31, | December 31, | |||
Provisions | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Impairment provision of Accounts receivable at the beginning of the year |
| |
| |
Increase (decrease) impairment of accounts receivable |
| ( |
| |
Write-off of receivables |
| — |
| ( |
Difference in exchange rate |
| ( |
| ( |
Impairment provision of Accounts Receivable Provision at the end of the year |
| |
| |
(1) Trade and other Receivables Provision |
| |
| |
(2) Current other Receivables Provision |
| |
| |
(3) Trade receivables with related parties, current Provision |
| |
| |
Recovery of Insurance |
| — |
| |
Impairment provision of Accounts Receivable |
| |
| |
Renegotiated receivables |
| |
| |
Non-renegotiated receivables |
| |
| |
F-66
12.3Hedging assets and liabilities
The balance represents derivative financial instruments measured at fair value which have been classified as hedges for exchange and interest rate risks relating to the total obligations with the public associated with bonds in UF and investments in Chilean pesos. (See more detail in Note 4.2 b).
| Hedging Reserve in | |||||||
As of December 31, 2022 |
| Assets |
| Liabilities |
| Total Realized | Gross Equity (1) | |
Type of Instrument: Cross currency interest rate swaps UF/CLP |
|
|
|
|
|
|
|
|
Cash flow hedge derivatives |
|
|
|
|
|
|
|
|
Short term |
| |
| |
| — |
| — |
Long term |
| |
| |
| — |
| — |
Subtotal |
| |
| |
| ( |
| ( |
Type of Instrument: Forwards |
|
|
|
|
|
|
|
|
Non-hedging derivates disbursement SQM Australia Pty |
|
|
|
|
|
|
|
|
Long term |
| |
| — |
| — |
| |
Subtotal |
| |
| — |
| — |
| |
Underlying Investments Hedge |
| |
| |
| ( |
| ( |
Type of Instrument: Forwards/Options | ||||||||
Non-hedge derivates with effect on income | ||||||||
Short term | | | — | | ||||
Underlying Investments Hedge | | | | | ||||
Total Instruments | | | | ( |
| Hedging Reserve in | |||||||
As of December 31, 2021 |
| Assets |
| Liabilities |
| Total Realized | Gross Equity (1) | |
Type of Instrument: Cross currency interest rate swaps UF/CLP |
|
|
|
|
|
|
|
|
Cash flow hedge derivatives |
|
|
|
|
|
|
|
|
Short term |
| |
| |
| — |
| — |
Long term |
| |
| |
| — |
| — |
Underlying Debt Hedge |
| |
| |
| ( |
| ( |
Type of Instrument: Forwards/Options |
|
|
|
|
|
|
|
|
Non-hedge derivatives with effect on income |
|
|
|
|
|
|
|
|
Short term |
| |
| |
| — |
| — |
Underlying Investments Hedge |
| |
| |
| |
| |
Total Instruments |
| |
| |
| ( |
| ( |
(1) | See underlying hedges in Note 4.2 letters b) and d) and movement of cash flow hedge reserve in Note 19.4. |
The balances in the column “Total Realized” consider the intermediate effects of the contracts that were in place between January 1 and December 31, 2022, and January 1 and December 31,2021.
Reconciliation of asset and |
| As of December | Cash Flow |
| Income Statement |
| Equity and Others | As of December | ||
liability hedging derivatives | 31, 2021 |
|
| 31, 2022 | ||||||
Hedge-to-debt derivatives |
| ( |
| |
| |
| | ( | |
Hedging derivatives to investment |
| |
| ( |
| | ( | ( | ||
Non-hedging derivatives disbursement SQM Australia Pty |
| — |
| |
| — | | | ||
Non-hedging derivatives |
| ( |
| ( |
| | — | ( |
Reconciliation of asset and |
| As of December | Cash Flow |
| Income Statement |
| Equity and Others | As of December | ||
liability hedging derivatives | 31, 2020 |
|
| 31, 2021 | ||||||
Hedge-to-debt derivatives |
| |
| |
| ( |
| ( | ( | |
Hedging derivatives to investment |
| ( |
| |
| | | | ||
Non-hedging derivatives |
| ( |
| ( |
| | — | ( |
F-67
Derivative contract maturities are detailed as follows:
Series | Contract amount | Currency |
| Maturity date | ||
| ThUS$ |
| ||||
H |
| |
| UF |
| 01/04/2023 |
O |
| |
| UF |
| 02/01/2030 |
P |
| |
| UF |
| 01/15/2028 |
Q |
| |
| UF |
| 06/01/2030 |
Effectiveness
The Company uses CCS, Forwards and IRS to hedge the potential financial risk associated with exchange rate and interest rate volatility. The objective is to hedge the exchange rate and inflation financial risks associated with bond obligations, exchange rate financial risks associated with investments in Chilean pesos, exchange rate financial risk associated with projects under construction in Australian dollars and interest rate financial risk associated with bank loans. Hedges are documented and qualitatively assessed to demonstrate their effectiveness based on a comparison of their critical terms.
The hedges used by the Company as of the reporting date are highly effective given that the amounts, currencies, exchange dates and rates of the hedged item and the hedge are aligned, maintaining a close economic relationship.
12.4Financial liabilities
Other current and non-current financial liabilities
As of December 31, 2022 and 2021, the detail is as follows:
As of December 31, 2022 | As of December 31, 2021 | |||||||||||
Other current and non-current financial |
| |||||||||||
liabilities |
| Currents |
| Non-Current |
| Total |
| Currents |
| Non-Current |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Liabilities at amortized cost |
|
|
|
|
|
|
|
|
|
|
|
|
Bank borrowings |
| |
| |
| |
| |
| |
| |
Unsecured obligations |
| |
| |
| |
| |
| |
| |
Derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
For hedging |
| |
| |
| |
| |
| |
| |
Non-Hedging |
| |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
| |
| |
F-68
a)Bank borrowings, current:
As of December 31, 2022, the detail of this caption is as follows:
Debtor |
| Payment of Creditor interest |
| ||||||||||||||||||
Currency or | |||||||||||||||||||||
adjustment | Payment of |
| |||||||||||||||||||
Tax ID No. |
| Company |
| Country |
| Tax ID No. |
| Financial institution |
| Country |
| index |
| Payment of interest |
| Repayment |
| Effective rate |
| Nominal rate |
|
93.007.000-9 | SQM S.A. | Chile | O-E | Scotiabank Cayman | USA | US$ | Upon maturity | 05/30/2023 | | % | | % | |||||||||
93.007.000-9 | SQM S.A. | Chile | 97.023.000-9 | Itaú | Chile | US$ | Upon maturity | 01/05/2023 | | % | | % | |||||||||
93.007.000-9 | SQM S.A. | Chile | 97.030.000-7 | Banco Estado | Chile | US$ | Upon maturity | 01/05/2023 | | % | | % |
Debtor |
| Creditor | Nominal amounts as of December 31, 2022 | Current amounts as of December 31, 2022 | ||||||||||||||
|
|
|
| 90 days to 1 |
|
| Borrowing |
| ||||||||||
Company | Financial institution | Up to 90 days | 90 days to 1 year |
| Total | Up to 90 days | year | Subtotal | costs | Total | ||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||
SQM S.A. |
| Scotiabank Cayman |
| |
| |
| |
| — |
| |
| |
| ( |
| |
SQM S.A. | Itaú | | | | | | | |||||||||||
SQM S.A. | Banco Estado | | | | | | | |||||||||||
SQM S.A. | Scotiabank | | | | | | | |||||||||||
Total |
| |
| |
| |
| |
| |
| |
| ( |
| |
On December 21, 2022, the Company signed a loan agreement with The Export-Import Bank of Korea (“Kexim”) and Banco Santander S.A., with the latter acting as Kexim’s Facility Agent, and the initial disbursement of funds became effective on January 10, 2023 for a value of US$
As of December 31,2021
|
|
|
|
|
|
|
|
| |||||||||||||
Debtor | Creditor | Currency or | |||||||||||||||||||
adjustment | |||||||||||||||||||||
Tax ID No |
| Company |
| Country | Tax ID No. |
| Financial institution |
| Country |
| index |
| Repayment | maturity | Effective rate | Nominal rate | |||||
93.007.000-9 | SQM S.A. | Chile | O-E | Scotiabank Cayman | USA |
| US$ | Upon maturity | 05/31/2022 | | % | | % |
Debtor |
| Creditor |
| Nominal amounts as of December 31, 2021 | Current amounts as of December 31, 2021 | |||||||||||||
| 90 days to |
|
|
| 90 days to 1 |
|
| Borrowing |
| |||||||||
Up to 90 days | 1 year | Total | Up to 90 days | year | Subtotal | costs | Total | |||||||||||
Company | Financial institution |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ||
SQM S.A. |
| Scotiabank Cayman |
| |
| |
| |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
| |
| |
| |
| |
b)Unsecured obligations, current:
As of December 31, 2022, and 2021, the detail of current unsecured interest-bearing obligations is composed of promissory notes and bonds, as follows:
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Debtor | Number of | Currency or | Periodicity | ||||||||||||||||||
registration or ID | adjustment | Payment of | |||||||||||||||||||
Tax ID No. |
| Company |
| Country |
| of the instrument |
| Series |
| Maturity date |
| index |
| interest |
| Repayment |
| Effective rate |
| Nominal rate |
|
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$250 |
| 01/28/2023 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$300 |
| 04/03/2023 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$450 |
| 05/07/2023 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$400 |
| 01/22/2023 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$700 |
| 03/10/2023 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| 564 |
| H |
| 01/05/2023 | UF |
| Semiannual |
| Semiannual |
| | % | | % | |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 699 |
| O |
| 02/01/2023 | UF |
| Semiannual |
| Upon maturity |
| | % | | % | |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 563 |
| P |
| 01/15/2023 | UF |
| Semiannual |
| Upon maturity |
| | % | | % | |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 700 |
| Q |
| 06/01/2023 | UF |
| Semiannual |
| Upon maturity |
| | % | | % |
F-69
Effective rates of bonds in Pesos and UF are expressed and calculated in Dollars based on the flows agreed in Cross Currency Swap Agreements.
|
| Nominal amounts as of December 31, 2022 |
| Carrying amounts of maturities as of December 31, 2022 | ||||||||||||||||
Up to 90 | 90 days to 1 | 90 days to 1 | Borrowing | |||||||||||||||||
Company |
| Country |
| Series |
| days |
| year |
| Total |
| Up to 90 days |
| year |
| Subtotal |
| costs |
| Total |
ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ||||||
SQM S.A. |
| Chile |
| MUS$250 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| MUS$300 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| MUS$450 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| MUS$400 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| MUS$700 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| H |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| O |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| P |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| Q |
| |
| |
| |
| |
| |
| |
| ( |
| |
Total |
| |
| |
| |
| |
| |
| |
| ( |
| |
As of December 31, 2021
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Debtor | Number of | Currency or | Periodicity | ||||||||||||||||||
registration or ID | adjustment | Payment of | |||||||||||||||||||
Tax I No. |
| Company |
| Country |
| of the instrument |
| Series |
| Maturity date |
| index |
| interest |
| Repayment |
| Effective rate |
| Nominal rate |
|
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$250 |
| 01/28/2022 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$300 |
| 04/03/2022 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$450 |
| 05/07/2022 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$400 |
| 01/22/2022 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$700 |
| 03/10/2022 | US$ |
| Semiannual |
| Upon maturity | | % | | % | ||
93.007.000-9 |
| SQM S.A. |
| Chile |
| 564 |
| H |
| 01/05/2022 | UF |
| Semiannual |
| Semiannual |
| | % | | % | |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 699 |
| O |
| 02/15/2022 | UF |
| Semiannual |
| Upon maturity |
| | % | | % | |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 563 |
| P |
| 01/15/2022 | UF |
| Semiannual |
| Upon maturity |
| | % | | % | |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 700 |
| Q |
| 06/01/2022 | UF |
| Semiannual |
| Upon maturity |
| | % | | % |
Effective rates of bonds in Pesos and UF are expressed and calculated in Dollars based on the flows agreed in Cross Currency Swap Agreements.
| Nominal amounts as of December 31, 2021 |
| Carrying amounts of maturities as of December 31, 2021 | |||||||||||||||||
Up to 90 | 90 days to 1 | 90 days to | ||||||||||||||||||
Company |
| Country |
| Series | days | year | Total | Up to 90 days |
| 1 year |
| Subtotal |
| Borrowing costs |
| Total | ||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||
SQM S.A. |
| Chile |
| MUS$250 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| MUS$300 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| MUS$450 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| MUS$400 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| MUS$700 |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| H |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| O |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| P |
| |
| |
| |
| |
| |
| |
| ( |
| |
SQM S.A. |
| Chile |
| Q |
| |
| |
| |
| |
| |
| |
| ( |
| |
Total |
| |
| |
| |
| |
| |
| |
| ( |
| |
c)Bank borrowings -non-current
The following table shows the details of bank loans as of December 31, 2022:
|
|
|
| ||||||||||||||||
Debtor | Creditor | Currency or |
| Type of | |||||||||||||||
Tax ID No. |
| Company |
| Country |
| Tax ID No. |
| Financial institution |
| Country |
| adjustment index |
| amortization |
| Effective rate |
| Nominal rate |
|
93.007.000-9 |
| SQM S.A. |
| Chile |
| O-E |
| Scotiabank Cayman |
| USA | US$ |
| Upon Maturity |
| | % | | % | |
93.007.000-9 | SQM S.A. | Chile | O-E | Scotiabank | Canadá | US$ | Upon Maturity | | % | | % |
Debtor |
| Creditor |
| Nominal non-current maturities as ofDecember 31, 2022 |
| Carrying amounts of maturities as of December 31, 2022 | ||||||||||||||||
Costs of | ||||||||||||||||||||||
Between 2 | Between 3 | Between 1 | Between 2 | Between 3 | obtaining | |||||||||||||||||
Company |
| Financial institution |
| Between 1 and 2 |
| and 3 |
| and 4 |
| Total |
| and 2 |
| and 3 |
| and 4 |
| Subtotal |
| loans |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||
SQM S.A. | Scotiabank Cayman | — | | | — | — | | | — | |||||||||||||
SQM S.A. |
| Scotiabank |
| — |
| |
| |
| |
| — |
| |
| |
| |
| ( |
| |
Total |
| — |
| |
| |
| |
| — |
| |
| |
| |
| ( |
| |
F-70
As of December 31, 2021
|
|
|
| ||||||||||||||||
Debtor | Creditor | Currency or |
| Type of | |||||||||||||||
Tax ID No. |
| Company |
| Country |
| Tax ID No. |
| Financial institution |
| Country |
| adjustment index |
| amortization |
| Effective rate |
| Nominal rate |
|
93.007.000-9 |
| SQM S.A. |
| Chile |
| O-E |
| Scotiabank Cayman |
| USA | US$ |
| Maturity |
| | % | | % |
Debtor |
| Creditor |
| Nominal non-current maturities as of December 31, 2021 |
| Carrying amounts of maturities as of December 31, 2021 | ||||||||||||||||
Costs of | ||||||||||||||||||||||
Between 2 | Between 3 | Between 1 | Between 2 | Between 3 | obtaining | |||||||||||||||||
Company |
| Financial institution |
| Between 1 and 2 |
| and 3 |
| and 4 |
| Total |
| and 2 |
| and 3 |
| and 4 |
| Subtotal |
| loans |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||
|
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| | ||
Total |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
d)Unsecured obligations, non-current
The following table shows the details of “unsecured debentures that accrue non-current interest” as of December 31, 2022:
| |||||||||||||||||||||
Debtor |
| Number of |
|
|
|
| Periodicity |
|
| ||||||||||||
registration or ID of | Currency or | Payment of |
| ||||||||||||||||||
Tax ID No. | Company | Country |
| the instrument |
| Series |
| Maturity date |
| adjustment index |
| interest |
| Repayment |
| Effective rate |
| Nominal rate | |||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$250 |
| 01/28/2025 |
| US$ |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$450 |
| 05/07/2029 |
| US$ |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$400 |
| 01/22/2050 |
| US$ |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$700 |
| 09/10/2051 |
| US$ |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 564 |
| H |
| 01/05/2030 |
| UF |
| Semiannual |
| Semiannual |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 699 |
| O |
| 02/01/2033 |
| UF |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 563 |
| P |
| 01/15/2028 |
| UF |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 700 |
| Q |
| 06/01/2038 |
| UF |
| Semiannual |
| Upon maturity |
| | % | | % |
Nominal non-current maturities as of December 31, 2022 | Carrying amounts of maturities as of December 31, 2022 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Bond |
| ||||||||||||||
Over 1 | Over 2 | Over 3 | Over 4 | Over 5 | Over 1 | Over 2 | Over 3 | Over 4 | Over 5 | issuance | ||||||||||||||||||
Series | year to 2 | years to 3 | Years to 4 | Years to 5 | years | Total | year to 2 | years to 3 | Years to 4 | Years to 5 | years | Subtotal | costs | Total | ||||||||||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
MUS$250 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
MUS$450 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
MUS$400 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
MUS$700 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
H |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
O |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
P |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Q |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Total |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
As of December 31,2021
| |||||||||||||||||||||
Debtor | Number of | Currency or | Periodicity |
| |||||||||||||||||
registration or ID | adjustment | Payment of | |||||||||||||||||||
Tax ID No. | Company | Country | of the instrument | Series | Maturity date | index | interest | Repayment | Effective rate | Nominal rate |
| ||||||||||
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$250 |
| 01/28/2025 |
| US$ |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$300 |
| 04/03/2023 |
| US$ |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$450 |
| 05/07/2029 |
| US$ |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| — |
| MUS$400 |
| 01/22/2050 |
| US$ |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| — | MUS$700 | 10/09/2051 | US$ | Semiannual |
| Upon maturity |
| | % | | % | ||||
93.007.000-9 |
| SQM S.A. |
| Chile |
| 564 |
| H |
| 01/05/2030 |
| UF |
| Semiannual |
| Semiannual |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 699 |
| O |
| 02/01/2033 |
| UF |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 563 |
| P |
| 01/15/2028 |
| UF |
| Semiannual |
| Upon maturity |
| | % | | % |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 700 |
| Q |
| 06/01/2038 |
| UF |
| Semiannual |
| Upon maturity |
| | % | | % |
F-71
Nominal non-current maturities as of December 31, 2021 | Carrying amounts of maturities as of December 31, 2021 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Bond |
| ||||||||||||||
Over 1 | Over 2 | Over 3 | Over 4 | Over 5 | Over 1 | Over 2 | Over 3 | Over 4 | Over 5 | issuance | ||||||||||||||||||
Series | year to 2 | years to 3 | Years to 4 | Years to 5 | years | Total | year to 2 | years to 3 | Years to 4 | Years to 5 | years | Subtotal | costs | Total | ||||||||||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
MUS$250 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
MUS$300 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
MUS$450 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
MUS$400 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
MUS$700 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
H |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
O |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
P |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Q |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Total |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
e)Additional information
Bonds
The details of each issuance are as follows:
(i)Series “H” bonds
On January 13, 2009, the Company placed the Series H bond for UF
2021
During 2021, the amortization of principal amounted to UF
2022
During 2022, amortization of principal amounted to UF 363.636.36, equivalent to ThUS$
For the periods ended December 31, 2022, and 2021, the Company has made the following payments with a charge to the Series H bonds and their associated CCS hedging:
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest, Series H bonds |
| |
| |
| |
CCS Coverage |
| |
| |
| |
(ii)Single series bonds, second issue MUS$
On April 21, 2010, the Company informed the CMF of its placement in international markets of an unsecured bond of ThUS$
The Company paid the principal on April 21, 2020.
F-72
For the periods ended December 31, 2022 and 2021, the detail of payments charged to the line of single series bonds, second issue is as follows.
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest |
| |
| — |
| |
(iii)Series “O” bonds
On April 4, 2012, the Company issued “Series O” for UF
For the periods ended December 31, 2022, and 2021, the Company has made the following payments with a charge to Series O bonds and their associated CCS hedging:
| As of |
| As of |
| As of | |
December 31, |
| December 31, |
| December 31, | ||
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest, Series O bonds |
| |
| |
| |
CCS Coverage |
| |
| |
| |
(iv)Single series bonds, third issue MUS$
On April 3, 2013, the Company issued a non-secured bond in the United States with a value of US$
For the periods ended December 31, 2022, and 2021, the following payments have been made with a debit to the line of single-series bonds, third issue:
| As of |
| As of |
| As of | |
December 31, |
| December 31, |
| December 31, | ||
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest |
| |
| |
| |
(v)Single series bonds, fourth issuance MUS $250
On October 23, 2014, the Company issued unsecured bonds amounting ThUS$
For the periods ended on December 31, 2022 and 2021, the following payments have been made.
| December 31, |
| December 31, |
| December 31, | |
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest |
| |
| |
| |
F-73
(vi)Series “P” bonds
The Company on March 31, 2008 issued the placement on the stock market of the Series “P” bond (the "Bonds” Series P) with a value of UF
The bonds Series P (i) mature on January 15, 2028; (ii) will accrue on the unpaid principal, expressed in UF, at an annual interest rate of
For the periods ended on December 31, 2022 and 2021, the following payments and their associated CCS have been made:
December 31, | December 31, | December 31, | ||||
Payments made | 2022 | 2021 | 2020 | |||
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Payments of interest, Series P bonds |
| |
| |
| |
CCS Coverage |
| |
| |
| |
(vii) Series Q bonds
On October 31, 2018, the issuance of Series Q bonds was authorized in the general stock market for the amount of UF
The bonds Series Q (i) mature on the first day of June 2038; (ii) will earn an interest rate of
On November 8, 2018, all the Series Q Bonds have been placed and sold to Euroamerica S.A. for a total amount of $
For the periods ended December 31, 2022 and 2021, the following payments have been made:
| December 31, |
| December 31, |
| December 31, | |
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest, Series Q bonds |
| |
| |
| |
CCS Coverage |
| |
| |
| |
(viii) Single series fifth issue bonds MUS$ 450
On May 7, 2019, the CMF was informed that the Company issued and placed unsecured bonds for ThUS$
For the periods ended on December 31, 2022 and 2021, the following payments have been made:
| December 31, |
| December 31, |
| December 31, | |
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest |
| |
| |
| |
(ix) Single series sixth issue bonds MUS$ 400
On January 22, 2020, the Company has placed unsecured bonds in international markets for US$
F-74
For the periods ended on December 31, 2022 and 2021, the following payments have been made:
| December 31, |
| December 31, |
| December 31, | |
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest |
| |
| |
| |
(x) Single series seventh issue bonds MUS$ 700
On September 10, 2021, the Company has placed unsecured bonds in international markets for US$
For the periods ended on December 31, 2022 and 2021, the following payments have been made:
| December 31, |
| December 31, |
| December 31, | |
Payments made | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Payments of interest |
| |
| — |
| — |
12.5Trade and other payables
a) Details trade and other payables
| As of December 31, 2022 |
| As of December 31, 2021 | |||||||||
Details trade and other payables |
| Current |
| Non-current |
| Current |
| Current |
| Non-current |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Accounts payable | |
| |
| | |
| |
| | ||
Other accounts payable | |
| |
| | |
| |
| | ||
Prepayments from customers | |
| |
| — | |
| |
| | ||
Total | |
| |
| | |
| |
| |
As of December 31, 2022, and 2021, the balance of current and past due accounts payable is made up as follows:
Suppliers current on all payments
| Amounts according to payment periods as of December 31, 2022 | |||||||||||||
|
|
|
|
|
| 366 and |
| |||||||
Up to 30 | 31 – 60 | 61 – 90 | 91 – 120 | 121 – 365 | more | |||||||||
Type of Supplier | Days | days | Days | days | days | days | Total | |||||||
ThUS$ | ||||||||||||||
Goods | |
| |
| |
| |
| |
| |
| | |
Services | |
| |
| |
| |
| |
| |
| | |
Others | |
| |
| |
| |
| |
| |
| | |
Total | |
| |
| |
| |
| |
| |
| |
| Amounts according to payment periods as of December 31, 2021 | |||||||||||||
|
|
|
|
|
| 366 and |
| |||||||
Up to 30 | 31 - 60 | 61 – 90 | 91 – 120 | 121 – 365 | more | |||||||||
Type of Supplier | Days | days | Days | days | days | days | Total | |||||||
ThUS$ | ||||||||||||||
Goods | |
| |
| |
| |
| |
| |
| | |
Services | |
| |
| |
| |
| |
| |
| | |
Others | |
| |
| |
| |
| |
| |
| | |
Total | |
| |
| |
| |
| |
| |
| |
F-75
Suppliers past due on payments
| Amounts according to payment periods as of December 31, 2022 | |||||||||||||
|
|
|
|
|
| 366 and |
| |||||||
Up to 30 | 31 – 60 | 61 – 90 | 91 – 120 | 121 – 365 | more | |||||||||
Type of Supplier | Days | days | Days | days | days | days | Total | |||||||
ThUS$ | ||||||||||||||
Goods | |
| |
| |
| |
| |
| |
| | |
Services | |
| |
| |
| |
| |
| |
| | |
Others | |
| |
| — |
| — |
| |
| |
| | |
Total | |
| |
| |
| |
| |
| |
| |
| Amounts according to payment periods as of December 31, 2021 | |||||||||||||
|
|
|
|
|
| 366 and |
| |||||||
Up to 30 | 31 – 60 | 61 – 90 | 91 – 120 | 121 – 365 | more | |||||||||
Type of Supplier | Days | days | Days | days | days | days | Total | |||||||
ThUS$ | ||||||||||||||
Goods | |
| |
| |
| |
| |
| |
| | |
Services | |
| |
| |
| |
| |
| |
| | |
Others | |
| |
| |
| |
| |
| |
| | |
Total | |
| |
| |
| |
| |
| |
| |
Purchase commitments held by the Company are recognized as liabilities when the goods and services are received by the Company. As of December 31, 2022, the Company has purchase orders amounting to ThUS$
12.6Financial asset and liability categories
| As of December 31, 2022 |
| As of December 31, 2021 | |||||||||
Description of financial assets |
| Current |
| Non-current |
| Total |
| Current |
| Non-current |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Cash and cash equivalent | |
| |
| | |
| |
| | ||
Trade receivables due from related parties at amortized cost | |
| |
| | |
| |
| | ||
Financial assets measured at amortized cost | |
| |
| | |
| |
| | ||
Trade and other receivables | |
| |
| | |
| |
| | ||
Total financial assets measured at amortized cost | |
| |
| | |
| |
| | ||
Financial instruments for hedging purposes | |
| |
| | |
| |
| | ||
Financial instruments held for trading | |
| |
| | |
| |
| | ||
Financial assets classified as available for sale at fair value through equity | |
| |
| | |
| |
| | ||
Total financial assets at fair value | |
| |
| | |
| |
| | ||
Total financial assets | |
| |
| | |
| |
| |
b)Financial Liabilities
| As of December 31, 2022 |
| As of December 31, 2021 | |||||||||
Description of financial liabilities |
| Current |
| Non-current |
| Total |
| Current |
| Non-current |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
For hedging purposes through equity | | | | | | | ||||||
Held for trading at fair value through profit or loss | | | | | | | ||||||
Financial liabilities at fair value | |
| |
| | |
| |
| | ||
Bank loans | |
| |
| | |
| |
| | ||
Unsecured obligations | |
| |
| | |
| |
| | ||
Lease Liabilities | |
| |
| | |
| |
| | ||
Trade and other payables | |
| |
| | |
| |
| | ||
Total financial liabilities at amortized cost | |
| |
| | |
| |
| | ||
Total financial liabilities | |
| |
| | |
| |
| |
F-76
12.7Fair value measurement of finance assets and liabilities
The fair value hierarchy is detailed as follows:
(a) | Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in level 1. |
(b) | Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. |
(c) | Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities. |
As of December 31, 2022 | Measurement Methodology | |||||||||||
Fair value | ||||||||||||
Carrying Amount at | (disclosure | Fair amount | ||||||||||
Fair value measurement of assets and liabilities | Amortized Cost | purposes) | registered | Level 1 | Level 2 | Level 3 | ||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| |
| |
| |
| |
| |
| |
Other current financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
- Time deposits |
| |
| |
| |
| |
| |
| |
- Derivative financial instruments |
| — |
| — |
| — |
| — |
| — |
|
|
- Forwards |
| |
| |
| |
| |
| |
| |
- Options |
| |
| |
| |
| |
| |
| |
- Hedging assets |
| |
| |
| |
| |
| |
| |
- Swaps |
| |
| |
| |
| |
| |
| |
Non-current accounts receivable |
| |
| |
| |
| |
| |
| |
Other non-current financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
- Other |
| |
| |
| |
| |
| |
| |
- Equity instruments |
| |
| |
| |
| |
| |
| |
- Hedging assets – Swaps |
| |
| |
| |
| |
| |
| |
Other current financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
- Bank borrowings |
| |
| |
| |
| |
| |
| |
- Derivative instruments |
| |
| |
| |
| |
| |
| |
- Forwards |
| |
| |
| |
| |
| |
| |
- Options |
| |
| |
| |
| |
| |
| |
- Hedging liabilities – Swaps |
| |
| |
| |
| |
| |
| |
- Swaps hedges, investments |
| |
| |
| |
| |
| |
| |
- Unsecured obligations |
| |
| |
| |
| |
| |
| |
Other non-current financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
- Bank borrowings |
| |
| |
| |
| |
| |
| |
- Unsecured obligations |
| |
| |
| |
| |
| |
| |
- Non-current hedging liabilities |
| |
| |
| |
| |
| |
| |
F-77
As of December 31, 2021 | Measurement Methodology | |||||||||||
Fair value | ||||||||||||
Carrying Amount at | (disclosure | Fair amount | ||||||||||
Fair value measurement of assets and liabilities | Amortized Cost | purposes) | registered | Level 1 | Level 2 | Level 3 | ||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| |
| |
| |
| |
| |
| |
Other current financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
- Time deposits |
| |
| |
| |
| |
| |
| |
- Derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
- Forwards |
| |
| |
| |
| |
| |
| |
- Options |
| |
| |
| |
| |
| |
| |
- Hedging assets |
| |
| |
| |
| |
| |
| |
- Swaps |
| |
| |
| |
| |
| |
| |
Non-current accounts receivable |
| |
| |
| |
| |
| |
| |
Other non-current financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
- Other |
| |
| |
| |
| |
| |
| |
- Equity instruments |
| |
| |
| |
| |
| |
| |
- Hedging assets – Swaps |
| |
| |
| |
| |
| |
| |
Other current financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
- Bank borrowings |
| |
| |
| |
| |
| |
| |
- Derivative instruments |
| — |
| — |
| — |
| — |
| — |
| — |
- Forwards |
| |
| |
| |
| |
| |
| |
- Options |
| |
| |
| |
| |
| |
| |
- Hedging liabilities – Swaps |
| |
| |
| |
| |
| |
| |
- Swaps hedges, investments |
| |
| |
| |
| |
| |
| |
- Unsecured obligations |
| |
| |
| |
| |
| |
| |
Other non-current financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
- Bank borrowings |
| |
| |
| |
| |
| |
| |
- Unsecured obligations |
| |
| |
| |
| |
| |
| |
- Non-current hedging liabilities |
| |
| |
| |
| |
| |
| |
12.8 Reconciliation of net debt and lease liabilities
This section presents an analysis of net debt plus lease liabilities and their movements for each of the reported periods. The definition of the net debt is described in Note 19.1. and includes current and non-current lease liabilities to complete its analysis.
As of | As of | |||
December 31, | December 31, | |||
Net debt | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Cash and cash equivalents |
| |
| |
Other current financial assets |
| |
| |
Other non-current financial hedge assets |
| |
| |
Other current financial liabilities |
| ( |
| ( |
Lease liabilities current |
| ( |
| ( |
Other non-current financial liabilities |
| ( |
| ( |
Non-current Lease liabilities |
| ( |
| ( |
Total |
| |
| ( |
As of | From cash flow | Not from cash flow | As of | |||||||||||||
December 31, | Amounts from | Amounts from | Other cash | Interests | Exchange rate | Fair value | December 31, | |||||||||
Net debt | 2021 | loans | interests | income/expenses | differences | 2022 | ||||||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ThUS$ | ||
Obligations with the public and bank loans |
| ( |
| ( |
| |
| |
| ( |
| ( |
| — | ( | |
Current and non-current lease liabilities |
| ( |
| |
| |
| |
| ( |
| |
| — | ( | |
Financial instruments derived from hedging |
| ( |
| |
| |
| |
| |
| |
| | ( | |
Non-hedging derivative financial instruments (net) | ( | | | ( | | | — | ( | ||||||||
Hedging and investment derivatives | | | | ( | | | ( | ( | ||||||||
Current and non-current financial liabilities |
| ( |
| ( |
| |
| ( |
| ( |
| ( |
| | ( | |
Cash and cash equivalents |
| |
| |
| |
| |
| |
| ( |
| — | | |
Deposits that do not qualify as cash and cash equivalents |
| |
| |
| ( |
| |
| |
| ( |
| — | | |
Derivatives for investment hedges SQM Australia |
| — |
| |
| |
| |
| |
| |
| | | |
Total |
| ( |
| ( |
| |
| |
| |
| ( |
| | |
F-78
As of | From cash flow | Not from cash flow | As of | |||||||||||||
December 31, | Amounts from | Amounts from | Other cash | Interests | Exchange rate | Fair value | December 31, | |||||||||
Net debt | 2020 | loans | interests | income/expenses | differences | 2021 | ||||||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ThUS$ | ||
Obligations with the public and bank loans |
| ( |
| ( |
| |
| |
| ( |
| |
| — | ( | |
Current and non-current lease liabilities |
| ( |
| |
| |
| |
| ( |
| |
| — | ( | |
Financial instruments derived from hedging |
| |
| ( |
| |
| |
| ( |
| |
| ( | ( | |
Derivatives from other financial non-hedge assets |
| ( |
| |
| |
| ( |
| |
| |
| — | ( | |
Current and non-current financial liabilities |
| ( |
| ( |
| |
| |
| ( |
| |
| ( | ( | |
Cash and cash equivalents |
| |
| |
| |
| |
| |
| ( |
| | ||
Deposits that do not qualify as cash and cash equivalents |
| |
| |
| ( |
| |
| |
| ( |
| — | | |
Derivatives from hedge assets |
| ( |
| |
| |
| |
| |
| |
| | | |
Total |
| ( |
| ( |
| |
| |
| ( |
| |
| ( | ( |
Note 13 Right-of-use assets and Lease liabilities
13.1Right-of-use assets
Other | ||||||||||||
Reconciliation of changes | property, | Machinery, | ||||||||||
in right-of-use assets as of | plant and | Transport | plant and | |||||||||
December 31, 2022, net value | Land | Buildings | equipment | equipment | equipment | Total | ||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Opening Balance |
| |
| |
| |
| |
| |
| |
Additions |
| |
| |
| |
| |
| |
| |
Depreciation expenses |
| ( |
| ( |
| |
| ( |
| ( |
| ( |
Transfer to property, plant and equipment |
| ( |
| |
| |
| |
| ( |
| ( |
Other increases / decreases |
| |
| ( |
| |
| |
| ( |
| |
Total changes |
| |
| ( |
| |
| ( |
| |
| |
Closing balance |
| |
| |
| |
| |
| |
| |
Other | ||||||||||||
Reconciliation of changes | property, | Machinery, | ||||||||||
in right-of-use assets as of | plant and | Transport | plant and | |||||||||
December 31, 2021, net value | Land | Buildings | equipment | equipment | equipment | Total | ||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Opening Balance |
| |
| |
| |
| |
| |
| |
Additions |
| |
| |
| |
| |
| |
| |
Depreciation expenses |
| ( |
| ( |
| |
| ( |
| ( |
| ( |
Other increases / decreases |
| |
| — |
| |
| |
| ( |
| ( |
Total changes |
| |
| ( |
| |
| |
| |
| |
Closing balance |
| |
| |
| |
| |
| |
| |
The Company’s lease activities included the following aspects:
(a) | The nature of the Company’s lease activities is related to contracts focused primarily on business operations, mainly rights-of-use to equipment and real estate, |
(b) | The Company does not estimate any significant future cash outflows that would potentially expose the Company, and these are likewise not reflected in the measurement of lease liabilities, related to concepts such as: (i) Variable lease payments, (ii) Extension options and termination options, (iii) Guaranteed residual value and (iv) Leases not yet undertaken but committed by the Company. |
(c) | These are not subject to restrictions or agreements imposed by contracts. |
There were no sales transactions with leases later in the period.
13.2Lease liabilities
| As of December 31, 2022 |
| As of December 31, 2021 | |||||
Lease liabilities |
| Current |
| Non-Current |
| Current |
| Non-Current |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Lease liabilities |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
F-79
i) Current and non-current lease liabilities
Debtor | Creditor |
| Contract |
| Type of |
| Maturity | |||||||||||
Tax ID No. |
| Company |
| Country |
| TAX ID No. |
| Supplier |
| Country |
| indexation unit |
| amortization |
| date |
| Effective rate |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 83.776.000-3 |
| Empresa Constructora Contex Ltda. |
| Chile |
| UF |
| Monthly |
| 03-31-2025 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 76.327.820-4 |
| Maquinaria Astudillo y Hermanos Ltda. |
| Chile |
| UF |
| Monthly |
| 01-08-2026 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 76.005.787-8 |
| Obras y Servicios para la Industria y Minería S.A. |
| Chile |
| Peso |
| Monthly |
| 12-15-2026 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 76.976.580-8 |
| Sociedad Comercial Grandleasing Chile Ltda |
| Chile |
| UF |
| Monthly |
| 06-01-2026 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 76.327.820-4 |
| Maquinaria Astudillo y Hermanos Ltda. |
| Chile |
| Peso |
| Monthly |
| 11-24-2025 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 76.158.471-5 |
| Sociedad Inmobiliaria Amaru SpA |
| Chile |
| UF |
| Monthly |
| 07-11-2023 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 76.327.820-4 |
| Maquinaria Astudillo y Hermanos Ltda. |
| Chile |
| UF |
| Monthly |
| 06-01-2026 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 76.951.498-8 |
| Inversiones y Gestión New Energy SpA |
| Chile |
| UF |
| Monthly |
| 04-01-2024 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 76.536.499-K |
| Jungheinrich Rentalift SpA |
| Chile |
| UF |
| Monthly |
| 05-01-2028 |
| |
79.626.800-K |
| SQM Salar S.A. |
| Chile |
| 83.472.500-2 |
| Tattersall Maquinarias S.A. |
| Chile |
| UF |
| Monthly |
| 05-01-2028 |
| |
79.947.100-0 |
| SQM Industrial S.A. |
| Chile |
| 96.856.400-5 |
| El Trovador S.A. |
| Chile |
| UF |
| Monthly |
| 02-08-2030 |
| |
79.947.100-0 |
| SQM Industrial S.A. |
| Chile |
| 76.976.580-8 |
| Sociedad Comercial Grandleasing Chile Ltda |
| Chile |
| UF |
| Monthly |
| 08-26-2024 |
| |
79.947.100-0 |
| SQM Industrial S.A. |
| Chile |
| 76.536.499-K |
| Jungheinrich Rentalif SPA |
| Chile |
| UF |
| Monthly |
| 10-07-2024 |
| |
79.947.100-0 |
| SQM Industrial S.A. |
| Chile |
| 76.320.186-4 |
| Tecno Fast S.A. |
| Chile |
| UF |
| Monthly |
| 12-31-2022 |
| |
96.592.190-7 |
| SQM Nitratos S.A. |
| Chile |
| 76.536.499-K |
| Jungheinrich Rentalif SPA |
| Chile |
| UF |
| Monthly |
| 10-07-2024 |
| |
93.007.000-9 |
| SQM S.A. |
| Chile |
| 76.536.499-K |
| Jungheinrich Rentalif SPA |
| Chile |
| UF |
| Monthly |
| 10-07-2024 |
| |
79.768.170-9 | Soquimich Comercial S.A. | Chile | 96.662.540-6 | Containers Operators S.A. | Chile | UF | Monthly | 12-31-2022 | ||||||||||
79.768.170-9 | Soquimich Comercial S.A. | Chile | 76.729.932-K | SAAM Logistics S.A. | Chile | UF | Monthly | 08-01-2022 | ||||||||||
79.768.170-9 | Soquimich Comercial S.A. | Chile | 91.577.000-2 | Muelles de Penco S.A. | Chile | UF | Monthly | 07-06-2023 | ||||||||||
79.768.170-9 | Soquimich Comercial S.A. | Chile | 91.577.000-2 | Muelles de Penco S.A. | Chile | UF | Monthly | 07-06-2023 | ||||||||||
79.768.170-9 | Soquimich Comercial S.A. | Chile | 76.722.280-7 | Inmobiliaria Chincui SPA | Chile | UF | Monthly | 05-01-2028 | ||||||||||
79.768.170-9 | Soquimich Comercial S.A. | Chile | 96.565.580-8 | Compañía de Leasing Tattersall S.A. | Chile | UF | Monthly | 07-05-2025 | ||||||||||
79.768.170-9 | Soquimich Comercial S.A. | Chile | 91.577.000-2 | Muelles de Penco S.A. | Chile | UF | Monthly | 03-01-2029 |
Debtor | Creditor |
| Contract |
| Type of |
| Maturity | |||||||||||
Tax ID No. |
| Company |
| Country |
| TAX ID No. |
| Supplier |
| Country |
| indexation unit |
| amortization |
| date |
| Effective rate |
76.359.919-1 |
| Orcoma SpA |
| Chile |
| 70.017.320-8 |
| Obispado de Iquique |
| Chile |
| Peso |
| Monthly |
| 07-12-2036 |
| |
76.359.919-1 |
| Orcoma SpA |
| Chile |
| 73.190.800-1 |
| Comunidad Indígena Aymara Pueblo de Pisiga Choque |
| Chile |
| UF |
| Monthly |
| 07-12-2024 |
| |
76.359.919-1 |
| Orcoma SpA |
| Chile |
| 6.848.218-6 |
| Ruth del Carmen Cortez Maturana |
| Chile |
| Peso |
| Monthly |
| 07-12-2031 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Paces West LL. |
| USA |
| Dollar |
| Monthly |
| 12-31-2027 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Hawkins Nunmber One, LLC |
| USA |
| Dollar |
| Monthly |
| 08-31-2024 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Deep South Equipment Company |
| USA |
| Dollar |
| Monthly |
| 03-24-2024 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Tennant-South |
| USA |
| Dollar |
| Monthly |
| 07-02-2023 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Deacon Jones CDJR |
| USA |
| Dollar |
| Monthly |
| 03-30-2024 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Mt Mullahey Inc. Mullahey Chrysler Dodge |
| USA |
| Dollar |
| Monthly |
| 09-11-2022 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Berwyn Partners Inc. |
| USA |
| Dollar |
| Monthly |
| 12-24-2024 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Myers Ford Co Inc. |
| USA |
| Dollar |
| Monthly |
| 06-25-2024 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Ford Motor Credit Company |
| USA |
| Dollar |
| Monthly |
| 05-17-2025 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Porter and Howard INC. |
| USA |
| Dollar |
| Monthly |
| 11-22-2025 |
| |
Foreign |
| SQM North America Corp. |
| USA |
| Foreign |
| Hanford Chrysler Dodge Jeep |
| USA |
| Dollar |
| Monthly |
| 07-18-2025 |
| |
Foreign |
| SQM Comercial de México S.A. de C.V. |
| México |
| Foreign |
| Onni Ensenada S.A. de C.V. |
| México |
| Dollar |
| Monthly |
| 12-03-2026 |
| |
Foreign |
| SQM Comercial de México S.A. de C.V. |
| México |
| Foreign |
| Madol Inmobiliaria S.A. de C.V. |
| México |
| Mexican Peso |
| Monthly |
| 10-31-2023 |
| |
Foreign |
| SQM Comercial de México S.A. de C.V. |
| México |
| Foreign |
| Madol Inmobiliaria S.A. de C.V. |
| México |
| Mexican Peso |
| Monthly |
| 10-31-2023 |
| |
Foreign |
| SQM Europe N.V. |
| Bélgica |
| Foreign |
| Straatsburgdok N.V. |
| Bélgica |
| Euro |
| Monthly |
| 03-31-2027 |
| |
Foreign |
| SQM Australia PTY |
| Australia |
| Foreign |
| Eagle Petroleum (WA) Pty Ltd |
| Australia |
| Australian dollar |
| Monthly |
| 06-21-2022 |
| |
Foreign |
| SQM Australia PTY |
| Australia |
| Foreign |
| The trust Company (Australia) Pty Ltd |
| Australia |
| Australian dollar |
| Monthly |
| 01-31-2021 |
| |
Foreign |
| SQM Australia PTY |
| Australia |
| Foreign |
| Ausco Modular Pty Limited |
| Australia |
| Australian dollar |
| Monthly |
| 01-31-2023 |
| |
Foreign |
| SQM Australia PTY |
| Australia |
| Foreign |
| Western Australian Land Authority |
| Australia |
| Australian dollar |
| Monthly |
| 08-31-2051 |
| |
Foreign | SQM Australia PTY | Australia | Foreign | Mining Thiess Pty Ltd. | Australia | Australian dollar | Monthly | 08-31-2051 | ||||||||||
Foreign | SQM Colombia S.A.S. | Colombia | Foreign | Mareauto Colombia S.A.S. | Colombia | COP | Monthly | 12-18-2023 | ||||||||||
Foreign | SQM Colombia S.A.S. | Colombia | Foreign | Renting Colombia S.A. | Colombia | COP | Monthly | 10-16-2024 | ||||||||||
Foreign | SQM Colombia S.A.S. | Colombia | Foreign | Renting Colombia S.A. | Colombia | COP | Monthly | 12-27-2024 | ||||||||||
Foreign | SQM África Pty | Sudáfrica | Foreign | Goscor Finance (Pty) Ltd | Sudáfrica | ZAR | Monthly | 11-01-2026 |
F-80
(a) | As of December 31, 2022 and 2021, current lease liabilities are analyzed as follows: |
Debtor | Creditor | Nominal amounts as of December 31, 2022 | Amounts at amortized cost as of December 31, 2022 | |||||||||||
Company |
| Supplier |
| Up to 90 days |
| 90 days to 1 year |
| Total | Up to 90 days | 90 days to 1 year | Total | |||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |||
SQM Salar S.A. | Empresa Constructora Contex Ltda | | | | | | | |||||||
SQM Salar S.A. | Maquinarias Industriales Astudillo Hermanos Ltda. | | | | | | | |||||||
SQM Salar S.A. | Maquinarias Industriales Astudillo Hermanos Ltda. | | | | | | | |||||||
SQM Salar S.A. | Sociedad Inmobiliaria Amaru SpA | | | | | | | |||||||
SQM Salar S.A. | Maquinarias Industriales Astudillo Hermanos Ltda. | | | | | | | |||||||
SQM Salar S.A. | Inversiones y Gestión New Energy SpA | | | | | | | |||||||
SQM Salar S.A. | Jungheinrich Rentalif SpA | | | | | | | |||||||
SQM Salar S.A. | Tattersall Maquinarias S.A. | | | | | | | |||||||
SQM Salar S.A. | Obras y Servicios para la industria y Minera S.A | | | | | | | |||||||
SQM Salar S.A. | Sociedad Comercial Grandlesing Chile Ltda | | | | | | | |||||||
SQM Industrial S.A. | El Trovador S.A. | | | | | | | |||||||
SQM Industrial S.A. | Sociedad Comercial Grandleasing Chile Ltda | | | | | | | |||||||
SQM Industrial S.A. | Jungheinrich Rentalift SpA | | | | | | | |||||||
SQM Nitratos S.A. | Jungheinrich Rentalift SpA | | | | | | | |||||||
SQM S.A. | Jungheinrich Rentalift SpA | | | | | | | |||||||
Orcoma SpA | Obispado de Iquique | | | | | | | |||||||
Orcoma SpA | Comunidad Indígena Aymara Pueblo de Pisiga Choque | | | | | | | |||||||
Orcoma SpA | Ruth del Carmen Cortez Maturana | | | | | | | |||||||
Soquimich Comercial S.A. | Muelles de Penco S.A. | | | | | | | |||||||
Soquimich Comercial S.A. | Muelles de Penco S.A. | | | | | | | |||||||
Soquimich Comercial S.A. | Inmobiliaria Chincui SPA | | | | | | | |||||||
Soquimich Comercial S.A. | Compañia de leasing Tattersall S.A. | | | | | | | |||||||
SQM North America Corp. | Paces West LL. | | | | | | | |||||||
SQM North America Corp. | Hawkins Nunmber One, LLC | | | | | | | |||||||
SQM North America Corp. | Deep South Equipment Company | | | | | | | |||||||
SQM North America Corp. | Tennant- South | | | | | | | |||||||
SQM North America Corp. | Deacon Jones CDJR | | | | | | | |||||||
SQM North America Corp. | Berwyn Partners Inc | | | | | | | |||||||
SQM North America Corp. | Myers Ford Co Inc | | | | | | | |||||||
SQM North America Corp. | Ford Motor Credit Company | | | | | | | |||||||
SQM North America Corp. | Porter and Howard INC | | | | | | | |||||||
SQM North America Corp. | Hanford Chrysler Dodge Jeep | | | | | | | |||||||
SQM Comercial de México S.A. de C.V. | Onni Ensenada S.A. de C.V. | | | | | | | |||||||
SQM Comercial de México S.A. de C.V. | Madol Inmobiliaria S.A. de C.V. | | | | | | | |||||||
SQM Comercial de México S.A. de C.V. | Madol Inmobiliaria S.A. de C.V. | | | | | | | |||||||
SQM Europe N.V. | Straatsburgdok N.V. | | | | | | | |||||||
SQM Australia PTY | Ausco Modular Pty Limited | | | | | |||||||||
SQM Australia PTY | Western Australian Land Authority | | | | | | | |||||||
SQM Australia PTY | Kwinana Refinery Lease - Laydown Area | | | | | | | |||||||
SQM Australia PTY | Thiess Pty Ltd | | | | | | | |||||||
SQM Australia PTY | Project JV | | | | | | | |||||||
SQM Colombia S.A.S. | Mareauto Colombia S.A.S. | | | | | | | |||||||
SQM Colombia S.A.S. | Renting Colombia S.A. | | | | | | | |||||||
SQM Colombia S.A.S. | Renting Colombia S.A. | | | | | | | |||||||
SQM Africa Pty | Goscor Finance (Pty) Ltd | | | | | | | |||||||
Total |
| |
| | | | | |
F-81
Debtor | Creditor | Nominal amounts as of December 31, 2021 | Amounts at amortized cost as of December 31, 2021 | |||||||||||
Company | Supplier | Up to 90 days | 90 days to 1 year | Total | Up to 90 days | 90 days to 1 year | Total | |||||||
|
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ThUS$ | ThUS$ | ||||
SQM Salar S.A. | Empresa Constructora Contex Ltda | | | | | | | |||||||
SQM Salar S.A. | Maquinarias Industriales Astudillo Hermanos Ltda. | | | | | | | |||||||
SQM Salar S.A. | SKM Industrial Ltda. | | | | | | | |||||||
SQM Salar S.A. | Maquinarias Industriales Astudillo Hermanos Ltda. | | | | | | | |||||||
SQM Salar S.A. | Sociedad Inmobiliaria Amaru SpA | | | | | | | |||||||
SQM Salar S.A. | Maquinarias Industriales Astudillo Hermanos Ltda. | | | | | | | |||||||
SQM Industrial S.A. | El Trovador S.A. | | | | | | | |||||||
SQM Industrial S.A. | Sociedad Comercial Grandleasing Chile Ltda | | | | | | | |||||||
SQM Industrial S.A. | Jungheinrich Rentalift SpA | | | | | | | |||||||
SQM Industrial S.A. | Tecnofast | | | | | | | |||||||
SQM Nitratos S.A. | Jungheinrich Rentalift SpA | | | | | | | |||||||
SQM S.A. | Jungheinrich Rentalift SpA | | | | | | | |||||||
Orcoma Estudios SpA | Obispado de Iquique | | | | | | | |||||||
Orcoma Estudios SpA | Comunidad Indígena Aymara Pueblo de Pisiga Choque | | | | | | | |||||||
Orcoma Estudios SpA | Ruth del Carmen Cortez Maturana | | | | | | | |||||||
Soquimich Comercial S.A. | Container Operators S.A. | | | | | | | |||||||
Soquimich Comercial S.A. | Muelles de Penco S.A. | | | | | | | |||||||
Soquimich Comercial S.A. | Muelles de Penco S.A. | | | | | | | |||||||
Soquimich Comercial S.A. | Inmobiliaria Chincui SPA | | | | | | | |||||||
Soquimich Comercial S.A. | Compañía de Leasing Tattersall S.A. | | | | | | | |||||||
SQM North America Corp. | Paces West LL. | | | | | | | |||||||
SQM North America Corp. | Hawkins Nunmber One, LLC | | | | | | | |||||||
SQM North America Corp. | Deep South Equipment Company | | | | | | | |||||||
SQM North America Corp. | Tennant- South | | | | | | | |||||||
SQM Comercial de México S.A. de C.V. | Onni Ensenada S.A. de C.V. | | | | | | | |||||||
SQM Comercial de México S.A. de C.V. | Madol Inmobiliaria S.A. de C.V. | | | | | | | |||||||
SQM Comercial de México S.A. de C.V. | Madol Inmobiliaria S.A. de C.V. | | | | | | | |||||||
SQM Europe N.V. | Straatsburgdok N.V. | | | | | | | |||||||
SQM Australia PTY | Ausco Modular Pty Limited | | | | | | | |||||||
SQM Australia PTY | Western Australian Land Authority | ( | ( | ( | ( | ( | ( | |||||||
SQM Australia PTY | Eagle Petroleum (WA) Pty Ltd | | | | | | | |||||||
SQM Australia PTY | Knight Frank | | | | | | | |||||||
SQM Colombia S.A.S. | Mareauto Colombia S.A.S. | | | | | | | |||||||
SQM Colombia S.A.S. | Renting Colombia S.A. | | | | | | | |||||||
SQM Colombia S.A.S. | Renting Colombia S.A. | | | | | | | |||||||
Total |
| |
| | | | | |
F-82
(b) | As of December 31, 2022 and 2021, the non-current lease liabilities are analyzed as follows: |
Debtor | Creditor | Nominal amounts as of December 31, 2022 | Amounts at amortized cost as of December 31, 2022 | |||||||||||||||
Company |
| Supplier |
| 1-2 Years |
| 2-3 Years |
| 3-4 Years |
| Total |
| 1-2 Years |
| 2-3 Years |
| 3-4 Years |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||
SQM Salar S.A. |
| Empresa Constructora Contex Ltda. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Maquinarias Industriales Astudillo Hermanos Ltda. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Maquinarias Industriales Astudillo Hermanos Ltda. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Maquinarias Industriales Astudillo Hermanos Ltda. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Inversiones y Gestión New Energy SpA. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Jungheinrich Rentalift SpA. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Tattersall Maquinarias S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Obras y Servicios para la industria y Minera S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Sociedad Comercial Grandlesing Chile Ltda |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Industrial S.A. |
| El Trovador S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Industrial S.A. |
| Sociedad Comercial Grandleasing Chile Ltda |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Industrial S.A. |
| Jungheinrich Rentalift SpA |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Nitratos S.A. |
| Jungheinrich Rentalift SpA |
| |
| |
| |
| |
| |
| |
| |
| |
SQM S.A. |
| Jungheinrich Rentalift SpA |
| |
| |
| |
| |
| |
| |
| |
| |
Orcoma Estudios SpA |
| Obispado de Iquique |
| |
| |
| |
| |
| |
| |
| |
| |
Orcoma Estudios SpA |
| Comunidad Indígena Aymara Pueblo de Pisiga Choque |
| |
| |
| |
| |
| |
| |
| |
| |
Orcoma Estudios SpA |
| Ruth del Carmen Cortez Maturana |
| |
| |
| |
| |
| |
| |
| |
| |
Soquimich Comercial S.A. |
| Muelles de Penco S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
Soquimich Comercial S.A. |
| Inmobiliaria Chincui SPA |
| |
| |
| |
| |
| |
| |
| |
| |
Soquimich Comercial S.A. |
| Compañia de leasing Tattersall S.A |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Paces West LL. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Hawkins Nunmber One, LLC |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Deep South Equipment Company |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Deacon Jones CDJR |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Berwyn Partners Inc |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Myers Ford Co Inc |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Ford Motor Credit Company |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Porter and Howard INC |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. | Hanford Chrysler Dodge Jeep | | | | | | | | | |||||||||
SQM Comercial de México S.A. de C.V. | Onni Ensenada S.A. de C.V. | | | | | | | | | |||||||||
SQM Europe N.V. | Straatsburgdok N.V. | | | | | | | | | |||||||||
SQM Australia PTY | Kwinana Refinery Lease - Laydown Area | | | | | | | | | |||||||||
SQM Australia PTY | Thiess Pty Ltd | | | | | | | | | |||||||||
SQM Australia PTY | Western Australian Land Authority | | | | | | | | | |||||||||
SQM Australia PTY | Project JV | | | | | | | | | |||||||||
SQM Colombia S.A.S. | Renting Colombia S.A. | | | | | | | | | |||||||||
SQM Colombia S.A.S. | Renting Colombia S.A. | | | | | | | | | |||||||||
SQM Africa Pty | Goscor Finance (Pty) Ltd | | | | | | | | | |||||||||
Total |
|
| |
| |
| |
| |
| |
| |
| |
| |
F-83
Debtor |
| Creditor |
| Nominal amounts as of December 31, 2021 |
| Amounts at amortized cost as of December 31, 2021 | ||||||||||||
Company | Supplier |
| 1-2 Years |
| 2-3 Years |
| 3-4 Years |
| Total |
| 1-2 Years |
| 2-3 Years |
| 3-4 Years |
| Total | |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||
SQM Salar S.A. |
| Empresa Constructora Contex Ltda |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Maquinarias Industriales Astudillo Hermanos Ltda. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| SKM Industrial Ltda. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Maquinarias Industriales Astudillo Hermanos Ltda. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Sociedad Inmobiliaria Amaru SpA |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Salar S.A. |
| Maquinarias Industriales Astudillo Hermanos Ltda. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Industrial S.A. |
| El Trovador S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Industrial S.A. |
| Sociedad Comercial Grandleasing Chile Ltda |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Industrial S.A. |
| Jungheinrich Rentalift SpA |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Industrial S.A. |
| Tecnofast |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Nitratos S.A. |
| Jungheinrich Rentalift SpA |
| |
| |
| |
| |
| |
| |
| |
| |
SQM S.A. |
| Jungheinrich Rentalift SpA |
| |
| |
| |
| |
| |
| |
| |
| |
Orcoma Estudios SpA |
| Obispado de Iquique |
| |
| |
| |
| |
| |
| |
| |
| |
Orcoma Estudios SpA |
| Comunidad Indígena Aymara Pueblo de Pisiga Choque |
| |
| |
| |
| |
| |
| |
| |
| |
Orcoma Estudios SpA |
| Ruth del Carmen Cortez Maturana |
| |
| |
| |
| |
| |
| |
| |
| |
Soquimich Comercial S.A. |
| Container Operators S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
Soquimich Comercial S.A. |
| Muelles de Penco S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
Soquimich Comercial S.A. |
| Muelles de Penco S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
Soquimich Comercial S.A. |
| Inmobiliaria Chincui SPA |
| |
| |
| |
| |
| |
| |
| |
| |
Soquimich Comercial S.A. |
| Compañía de Leasing Tattersall S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Paces West LL. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Hawkins Nunmber One, LLC |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Deep South Equipment Company |
| |
| |
| |
| |
| |
| |
| |
| |
SQM North America Corp. |
| Tennant- South |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Comercial de México S.A. de C.V. |
| Onni Ensenada S.A. de C.V. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Comercial de México S.A. de C.V. |
| Madol Inmobiliaria S.A. de C.V. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Comercial de México S.A. de C.V. |
| Madol Inmobiliaria S.A. de C.V. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Europe N.V. |
| Straatsburgdok N.V. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Australia PTY |
| Ausco Modular Pty Limited |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Australia PTY |
| Western Australian Land Authority |
| |
| |
| |
| |
| ( |
| |
| |
| |
SQM Colombia S.A.S. |
| Mareauto Colombia S.A.S. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Colombia S.A.S. |
| Renting Colombia S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
SQM Colombia S.A.S. |
| Renting Colombia S.A. |
| |
| |
| |
| |
| |
| |
| |
| |
Total |
|
| |
| |
| |
| |
| |
| |
| |
| |
Other lease disclosures
Total lease expenses related to lease payments that did not qualify under the scope of IFRS 16 were ThUS$
Expenses related to variable payments not included in lease liabilities were ThUS$
Income from subleases on right-of-use assets were ThUS$
Payments for contractual operating leases are disclosed in Note 4.2 Liquidity Risk.
F-84
Note 14 Intangible assets and goodwill
14.1Reconciliation of changes in intangible assets and goodwill
As of December 31, 2022 | ||||
Intangible assets and goodwill |
| Useful life |
| Net Value |
ThUS$ | ||||
IT programs |
|
| | |
Mining rights |
|
| | |
Water rights and rights of way |
|
| | |
Water rights |
|
| | |
Intellectual property |
|
| | |
Other intangible assets |
|
| | |
Intangible assets other than goodwill |
|
|
| |
Goodwill |
|
| | |
Total Intangible Asset |
|
|
| |
As of December 31, 2021 | ||||
Intangible assets and goodwill |
| Useful life |
| Net Value |
ThUS$ | ||||
IT programs |
|
| | |
Mining rights |
|
| | |
Water rights and rights of way |
|
| | |
Water rights |
|
| | |
Intellectual property |
|
| | |
Other intangible assets |
|
| | |
Intangible assets other than goodwill |
|
|
| |
Goodwill |
| Indefinite |
| |
Total Intangible Asset |
|
|
| |
a) | Movements in identifiable intangible assets as of December 31, 2022: |
Water rights, | Customer- | |||||||||||||||||
Movements in identifiable intangible assets | Mining rights, | and rights of | Water rights | related | Intellectual | Other intangible | ||||||||||||
| IT programs |
| Finite |
| way, Indefinite |
| Finite |
| intangible assets |
| property |
| assets |
| Goodwill |
| Total | |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||
As of January 1, 2022 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Additions |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Amortization for the year |
| ( |
| ( |
| — |
| ( |
| — |
| ( |
| ( |
| — |
| ( |
Impairment losses recognized in profit or loss for the year (2) |
| |
| ( |
| |
| |
| |
| |
| |
| ( |
| ( |
Other increases / decreases for foreign currency exchange rates |
| ( |
| |
| |
| |
| |
| ( |
| |
| |
| ( |
Decreases through sale |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Transferred from available for sale |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Other increases (decreases) |
| |
| ( |
| |
| |
| |
| |
| |
| |
| |
Subtotal |
| ( |
| ( |
| |
| ( |
| |
| ( |
| ( |
| ( |
| ( |
As of December 31,2022 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Historical cost |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Accumulated amortization | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||
As of January 1, 2021 |
| |
| |
| |
| |
| — |
| |
| |
| |
| |
Additions |
| |
| |
| — |
| — |
| — |
| — |
| |
| — |
| |
Amortization for the year |
| ( |
| ( |
| — |
| ( |
| — |
| ( |
| ( |
| — |
| ( |
Impairment losses recognized in profit or loss for the year (1) |
| — |
| ( |
| ( |
| — |
| — |
| — |
| — |
| — |
| ( |
Other increases / decreases for foreign currency exchange rates |
| ( |
| |
| ( |
| — |
| — |
| — |
| ( |
| — |
| |
Decreases through sale |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Transferred from available for sale |
| — |
| |
| — |
| — |
| — |
| — |
| — |
| — |
| |
Other increases (decreases) |
| |
| ( |
| — |
| — |
| — |
| |
| — |
| ( |
| ( |
Subtotal |
| ( |
| ( |
| ( |
| ( |
| — |
| |
| ( |
| ( |
| ( |
As of December 31,2021 |
| |
| |
| |
| |
| — |
| |
| |
| |
| |
Historical cost |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Accumulated amortization | ( | ( | ( | ( | ( | ( | ( | ( | ( |
(1) | See Note 21.5 |
(2) | A determination made in the fourth quarter of 2022 led to the identification of assets that are not in the company’s long-term business plan. Therefore, the Company recognized impairment for the value of certain intangible assets and associated goodwill in an amount of ThUS$ |
F-85
(b) | Movements in identifiable goodwill as of December 31, 2022 and 2021: |
Accumulated impairment |
| Goodwill at the beginning |
| Additional |
| Impairment losses recognized in |
| Total increase |
| Ending balance as of december 31, 2022 |
Movements in identifiable goodwill | of period January 1, 2022 | recognition | profit or loss for the year (-) | (decrease) | ||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||
SQM S.A. |
| |
| |
| ( |
| ( |
| |
SQM Iberian S.A. |
| |
| |
| |
| |
| |
SQM Investment Corporation |
| |
| |
| |
| |
| |
Soquimich European Holding B.V. |
| |
| |
| ( |
| ( |
| |
SQM Potasio S.A. |
| |
| |
| |
| |
| |
Ending balance as of December 31,2022 |
| |
| |
| ( |
| ( |
| |
Accumulated impairment |
| Goodwill at the beginning |
| Additional |
| Impairment losses recognized in |
| Total increase |
| Ending balance as of december 31, 2021 |
Movements in identifiable goodwill | of period January 1, 2021 | recognition | profit or loss for the year (-) | (decrease) | ||||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
SQM S.A. |
| |
| — |
| — |
| — |
| |
SQM Iberian S.A. |
| |
| — |
| — |
| — |
| |
SQM Investment Corporation |
| |
| — |
| — |
| — |
| |
Soquimich European Holding B.V. |
| |
| — |
| — |
| — |
| |
SQM Holland B.V. (*) |
| |
| — |
| — |
| ( |
| — |
SQM Potasio S.A. |
| |
| — |
| — |
| — |
| |
Ending balance as of December 31,2021 |
| |
| — |
| — |
| ( |
| |
(*) The measurement of assets and liabilities related to the acquisition of WNSPK (see Note 7) was completed in 2021 and as a result ThUS$
F-86
Note 15 Property, plant and equipment
As of December 31, 2022, and 2021, the detail of property, plant and equipment is as follows:
15.1Types of property, plant and equipment
| As of |
| As of | |
December 31, | December 31, | |||
Description of types of property, plant and equipment | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Property, plant and equipment, net |
|
|
|
|
Land |
| |
| |
Buildings |
| |
| |
Other property, plant and equipment |
| |
| |
Transport equipment |
| |
| |
Supplies and accessories |
| |
| |
Office equipment |
| |
| |
Network and communication equipment |
| |
| |
Mining assets |
| |
| |
IT equipment |
| |
| |
Energy generating assets |
| |
| |
Constructions in progress |
| |
| |
Machinery, plant and equipment |
| |
| |
Total |
| |
| |
Property, plant and equipment, gross |
|
|
|
|
Land |
| |
| |
Buildings |
| |
| |
Other property, plant and equipment |
| |
| |
Transport equipment |
| |
| |
Supplies and accessories |
| |
| |
Office equipment |
| |
| |
Network and communication equipment |
| |
| |
Mining assets |
| |
| |
IT equipment |
| |
| |
Energy generating assets |
| |
| |
Constructions in progress |
| |
| |
Machinery, plant and equipment |
| |
| |
Total |
| |
| |
Accumulated depreciation and value impairment of property, plant and equipment, total |
|
|
|
|
Accumulated depreciation and impairment of buildings |
| ( |
| ( |
Accumulated depreciation and impairment of other property, plant and equipment |
| ( |
| ( |
Accumulated depreciation and impairment of transport equipment |
| ( |
| ( |
Accumulated depreciation and impairment of supplies and accessories |
| ( |
| ( |
Accumulated depreciation and impairment of office equipment |
| ( |
| ( |
Accumulated depreciation and impairment of network and communication equipment |
| ( |
| ( |
Accumulated depreciation and impairment of mining assets |
| ( |
| ( |
Accumulated depreciation and impairment of IT equipment |
| ( |
| ( |
Accumulated depreciation and impairment of energy generating assets |
| ( |
| ( |
Accumulated depreciation and impairment of machinery, plant and equipment |
| ( |
| ( |
Total |
| ( |
| ( |
F-87
| As of |
| As of | |
December 31, | December 31, | |||
Description of classes of property, plant and equipment | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Property, plant and equipment, net |
|
|
|
|
Pumps |
| |
| |
Conveyor Belt |
| |
| |
Crystallizer |
| |
| |
Plant Equipment |
| |
| |
Tanks |
| |
| |
Filter |
| |
| |
Electrical equipment/facilities |
| |
| |
Other Property, Plant & Equipment |
| |
| |
Site Closure |
| |
| |
Piping |
| |
| |
Well |
| |
| |
Pond |
| |
| |
Spare Parts (1) |
| |
| |
Total |
| |
| |
(1) | The reconciliation of the spare parts provisions as of December 31, 2022 and 2021 is as follows: |
| As of |
| As of | |
December 31, | December 31, | |||
Reconciliation | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Opening balance |
| |
| |
Increase in provision |
| |
| |
Closing balance |
| |
| |
15.2Reconciliation of changes in property, plant and equipment by type:
Reconciliation of changes in property, plant and equipment by class as of December 31, 2022 and 2021:
|
|
| Other |
|
|
|
|
|
|
|
|
|
| |||||||||||||
Reconciliation of changes in property, | property, | Supplies | Network and | Energy | Assets | Machinery, | Property, | |||||||||||||||||||
plant and equipment by class as of | plant and | Transport | and | Equipment | communication | Mining | IT | generating | under | plant and | plant and | |||||||||||||||
Land | Buildings | equipment | equipment | accessories | office | equipment | assets | equipment | assets | construction | equipment | equipment | ||||||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||||
At January 1, 2022 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Additions |
| — |
| |
| |
| |
| |
| |
| |
| — |
| |
| — |
| |
| |
| |
Disposals |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( |
Depreciation for the year | — | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||
Impairment (2) | — | ( | ( | ( | ||||||||||||||||||||||
Increase (decrease) in foreign currency translation difference (2) |
| ( |
| ( |
| — |
| — |
| — |
| ( |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( |
Reclassifications |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| — |
| ( |
| |
| — |
Other increases (decreases) |
| — |
| ( |
| ( |
| — |
| ( |
| ( |
| — |
| — |
| ( |
| — |
| ( |
| |
| |
Decreases for classification as held for sale |
| ( |
| ( |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
Subtotal |
| ( |
| |
| |
| |
| ( |
| ( |
| |
| |
| ( |
| ( |
| |
| |
| |
As of December 31, 2022 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Historical cost | | | | | | | | | | | | | | |||||||||||||
Accumulated depreciation | — | ( | ( | ( | ( | ( | ( | ( | ( | ( | — | ( | ( | |||||||||||||
At January 1, 2021 | | | | | | | | | | | | | | |||||||||||||
Additions | — | — | | — | — | | | — | | — | | | | |||||||||||||
Disposals | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||
Depreciation for the year | — | ( | ( | ( | ( | ( | ( | ( | ( | ( | — | ( | ( | |||||||||||||
Impairment (2) | — | ( | ( | — | ( | ( | — | — | ( | — | — | ( | ( | |||||||||||||
Increase (decrease) in foreign currency translation difference (2) | ( | ( | ( | — | — | ( | — | — | — | — | — | ( | ( | |||||||||||||
Reclassifications | — | | | | | | | | | — | ( | | — | |||||||||||||
Other increases (decreases) | — | | ( | ( | — | — | | — | | — | | | | |||||||||||||
Decreases for classification as held for sale | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||
Subtotal | ( | | ( | ( | | | | ( | ( | ( | | | | |||||||||||||
As of December 31, 2021 | | | | | | | | | | | | | | |||||||||||||
Historical cost | | | | | | | | | | | | | | |||||||||||||
Accumulated depreciation | — | ( | ( | ( | ( | ( | ( | ( | ( | ( | — | ( | ( |
(1) | The net balance of “Other Increases (Decreases)” corresponds to all those items that are reclassified to or from “Property, Plant and Equipment”, They can have the following origin: (i) work in progress which is expensed to profit or loss, forming part of operating costs or other expenses per function, as appropriate; (ii) the variation representing the purchase and use of materials and spare parts; (iii) projects corresponding mainly to exploration expenditures and ground studies that are reclassified to the item other non-current financial assets; (iv) software that is reclassified to “Intangibles (v) Provisions related to the investment plan and assets related to closing the site. |
(2) | See note 21.5. This corresponds to assets identified as not being used in the operation due to their specific characteristics. |
F-88
15.3Detail of property, plant and equipment pledged as guarantee
There are no restrictions in title or guarantees for compliance with obligations that affect property, plant and equipment.
15.4Cost of capitalized interest, property, plant and equipment
The rates and costs for capitalized interest of property, plant and equipment are detailed as follows:
| As of |
| As of |
| |
December 31, | December 31, |
| |||
Costs of capitalized interest | 2022 | 2021 |
| ||
ThUS$ | ThUS$ |
| |||
Weighted average capitalization rate of capitalized interest costs |
| | % | | % |
Amount of interest cost capitalized |
| |
| |
Note 16 Other current and non-current non-financial assets
As of December 31, 2022, and 2021, the detail of “Other Current and Non-current Assets” is as follows:
| As of |
| As of | |
December 31, | December 31, | |||
Other non-financial assets, current | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Domestic Value Added Tax |
| |
| |
Foreign Value Added Tax |
| |
| |
Prepaid mining licenses |
| |
| |
Prepaid insurance |
| |
| |
Other prepayments |
| |
| |
Refund of Value Added Tax to exporters |
| |
| |
Other taxes |
| |
| |
Other assets |
| |
| |
Total |
| |
| |
| As of |
| As of | |
December 31, | December 31, | |||
Other non-financial assets, non-current | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Exploration and evaluation expenses |
| |
| |
Guarantee deposits |
| |
| |
Other assets |
| |
| |
Total |
| |
| |
Movements in assets for the exploration and evaluation of mineral resources as of December 31, 2022, and 2021:
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Reconciliation | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Opening balance |
| |
| |
| |
Change in assets for exploration and evaluation of mineral resources |
|
|
|
|
|
|
Additions |
| |
| |
| — |
Short term reclassifications |
| ( |
| |
| ( |
Increase (decrease) due to transfers and other charges |
| |
| |
| ( |
Total changes |
| |
| |
| ( |
Total |
| |
| |
| |
As of December 31, 2022 and 2021, no reevaluations of assets for exploration and assessment of mineral resources have been conducted.
F-89
Mineral resource exploration and evaluation expenditure
Given the nature of operations of the Company and the type of exploration it undertakes, disbursements for exploration can be found in 4 stages: Execution, economically feasible, not economically feasible and in exploitation:
(a)Not economically feasible: Exploration and evaluation disbursements, once finalized and concluded to be not economically feasible, will be charged to profit and loss. As of December 31, 2022, and 2021 there were no disbursements for this concept.
(b)Execution: Disbursements for exploration and evaluation under implementation and therefore prior to determination of economic feasibility, are presented as part of property, plant and equipment as constructions in progress.
| As of |
| As of | |
December 31, | December 31, | |||
Explorations in execution | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Chile |
| |
| |
Total |
| |
| |
| As of |
| As of | |
December 31, | December 31, | |||
Conciliation of explorations in execution | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Opening balance |
| |
| |
Disbursements |
| |
| |
Reclassifications |
| ( |
| ( |
Total changes |
| |
| ( |
Total |
| |
| |
(c)Economically feasible: Reimbursements for exploration and evaluation whose study concluded that its economic viability is viable are classified in “Other non-financial assets, non-current.”
|
| As of |
| As of | ||
December 31, | December 31, | |||||
Prospecting | Type of Exploration | 2022 | 2021 | |||
ThUS$ | ThUS$ | |||||
Chile (1) |
| Metallic/Non-Metallic |
| |
| |
Total |
| |
| |
(1) | The value presented for Chile is composed as of December 2022 of ThUS |
Economically feasible metallic explorations are those classified as advanced exploration.
| As of |
| As of | |
December 31, | December 31, | |||
Prospecting conciliation | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Opening balance |
| |
| |
Additions |
| |
| |
Reclassifications from Exploration in execution – Chile |
| |
| |
Reclassifications to Exploration in Exploitation-Chile |
| ( |
| ( |
Total changes |
| |
| |
Total |
| |
| |
F-90
(d)In Exploitation: Caliche exploration disbursements that are found in this area are amortized based on the material exploited, the portion that is expected to be exploited in the following 12 months is presented as “Current Assets” in the “Inventories in process” and the remaining portion is classified as “Other Non-current Non-Financial Assets”.
| As of |
| As of | |
December 31, | December 31, | |||
Short-Term Exploitation Conciliation | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Opening balance |
| |
| |
Amortization |
| — |
| ( |
Reclassifications |
| |
| |
Total changes |
| |
| ( |
Total |
| |
| |
| As of |
| As of | |
December 31, | December 31, | |||
Long-Term Exploitation Conciliation | 2022 | 2021 | ||
ThUS$ | ThUS$ | |||
Opening balance |
| |
| |
Amortization |
| ( |
| — |
Reclassifications |
| |
| |
Total changes |
| ( |
| |
Total |
| |
| |
Note 17 Employee benefits
17.1Provisions for employee benefits
| As of |
| As of | |
December 31, | December 31, | |||
Classes of benefits and expenses by employee | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Current |
|
|
|
|
Profit sharing and bonuses |
| |
| |
Performance bonus and operational |
| |
| |
Total |
| |
| |
Non-current |
|
|
|
|
Profit sharing and bonuses |
| |
| |
Severance indemnity payments |
| |
| |
Total |
| |
| |
17.2Policies on defined benefit plan
This policy is applied to all benefits received for services provided by the Company’s employees. This is divided as follows:
a) | Short-term benefits for active employees are represented by salaries, social welfare benefits, paid time off, sickness and other types of leave, profit sharing and incentives and non-monetary benefits; e.g., healthcare service, housing, subsidized or free goods or services. These will be paid in a term which does not exceed twelve months. The Company maintains incentive programs for its employees, which are calculated based on the net result at the close of each period by applying a factor obtained from an evaluation based on their personal performance, the Company’s performance and other short-term and long-term indicators. |
b) | Staff severance indemnities are agreed and payable based on the final salary, calculated in accordance with each year of service to the Company, with certain maximum limits in respect of either the number of years or in monetary terms. In general, this benefit is payable when the employee or worker ceases to provide his/her services to the Company and there are a number of different circumstances through which a person can be eligible for it, as indicated in the respective agreements; e.g. retirement, dismissal, voluntary retirement, incapacity or disability, death, etc. See Note 17.3. |
F-91
c) | Obligations after employee retirement, described in Note 17.4. |
d) | Retention bonuses for a group of Company executives, described in Note 17.6. |
17.3 Other long-term benefits
The actuarial assessment method has been used to calculate the Company’s obligations with respect to staff severance indemnities, which relate to defined benefit plans consisting of days of remuneration per year served at the time of retirement under conditions agreed in the respective agreements established between the Company and its employees.
Under this benefit plan, the Company retains the obligation to pay staff severance indemnities related to retirement, without establishing a separate fund with specific assets, which is referred to as not funded.
Benefit payment conditions
The staff severance indemnity benefit relates to remuneration days for years worked for the Company without a limit being imposed in regard of amount of salary or years of service. It applies when employees cease to work for the Company because they are made redundant or in the event of their death. This benefit is applicable up to a maximum age of
Methodology
The determination of the defined benefit obligation is made under the requirements of IAS 19 “Employee benefits”.
17.4Post-employment benefit obligations
Our subsidiary SQM NA, together with its employees established a pension plan until 2002 called the “SQM North America Retirement Income Plan”. This obligation is calculated measuring the expected future forecast staff severance indemnity obligation using a net salary gradual rate of restatements for inflation, mortality and turnover assumptions, discounting the resulting amounts at present value using the interest rate defined by the authorities.
Since 2003, SQM NA offers benefits related to pension plans based on the 401-K system to its employees, which do not generate obligations for the Company.
A settlement was reflected in the last quarter of 2022 for the purchase of annuities by the pension plan for all inactive participants.
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Reconciliation Changes in the benefit obligation | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Opening balance |
| |
| |
| |
Current cost of service |
| |
| |
| |
Interest cost |
| |
| |
| |
Actuarial gains loss |
| ( |
| ( |
| |
Settlement | ( | |||||
Benefits paid |
| ( |
| ( |
| ( |
Total benefit obligation (A) |
| |
| |
| |
F-92
| As of |
| As of |
| As of | |
Reconciliation | December 31, | December 31, | December 31, | |||
Changes in plan assets | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Fair value of plan assets at the start of the year |
| |
| |
| |
Real return (loss) in the plan assets |
| ( |
| |
| |
Benefits paid |
| ( |
| ( |
| ( |
Settlement |
| ( |
| — |
| — |
Fair value of plan assets at the end of the year |
| |
| |
| |
Non-current-assets |
| |
| |
| |
Elements not yet recognized as components of the cost of periodic net pensions: |
|
|
|
|
|
|
Net actuarial loss at the beginning of the year |
| |
| |
| ( |
Amortization during the year |
| |
| |
| |
Settlement | ( | — | — | |||
Gain |
| |
| |
| |
Adjustment to recognize the minimum pension obligation |
| |
| |
| |
| For the |
| For the |
| For the | |
year ended | year ended | year ended | ||||
Cost of service or benefits received during the year | 2022 | 2021 | 2020 | |||
| ThUS$ | ThUS$ | ThUS$ | |||
Financial cost |
| |
| |
| |
Real loss in plan assets |
| ( |
| ( |
| ( |
Settlement |
| ( |
| |
| |
Amortization of prior year losses | — | — | | |||
Net periodic pension expenses |
| ( |
| ( |
| ( |
17.5Staff severance indemnities
As of December 31, 2022, and 2021, severance indemnities calculated at the actuarial value are as follows:
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Staff severance indemnities | 2022 | 2021 | 2020 | |||
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Opening balance |
| ( |
| ( |
| ( |
Current cost of service |
| ( |
| ( |
| ( |
Interest cost |
| ( |
| ( |
| ( |
Actuarial gain loss |
| ( |
| |
| ( |
Exchange rate difference |
| |
| |
| ( |
Benefits paid during the year |
| |
| |
| |
Total |
| ( |
| ( |
| ( |
(a)Actuarial assumptions
The liability recorded for staff severance indemnity is valued at the actuarial value method, using the following actuarial assumptions:
| As of |
| As of |
| As of |
| ||
December 31, | December 31, | December 31, | ||||||
Actuarial assumptions | 2022 | 2021 | 2020 | Annual/Years | ||||
Mortality rate |
|
|
|
|
| |||
Actual annual interest rate |
| | % | | % | | % |
|
Voluntary retirement rate: |
|
|
|
|
|
|
|
|
Men |
| | % | | % | | % | Annual |
Women |
| | % | | % | | % | Annual |
Salary increase |
| | % | | % | | % | Annual |
Retirement age: |
|
|
|
|
|
|
|
|
Men |
|
|
|
| Years | |||
Women |
|
|
|
| Years |
F-93
(b)Sensitivity analysis of assumptions
As of December 31, 2022, 2021 and 2020, the Company has conducted a sensitivity analysis of the main assumptions of the actuarial calculation, determining the following:
| Effect + 100 basis |
| Effect - 100 basis | |
Sensitivity analysis as of December 31, 2022 | points | points | ||
| ThUS$ |
| ThUS$ | |
Discount rate |
| ( |
| |
Employee turnover rate |
| ( |
| |
| Effect + 100 basis |
| Effect - 100 basis | |
Sensitivity analysis as of December 31, 2021 | points | points | ||
| ThUS$ |
| ThUS$ | |
Discount rate |
| ( |
| |
Employee turnover rate |
| ( |
| |
| Effect + 100 basis |
| Effect - 100 basis | |
Sensitivity analysis as of December 31, 2020 | points | points | ||
| ThUS$ |
| ThUS$ | |
Discount rate |
| ( |
| |
Employee turnover rate |
| ( |
| |
Sensitivity relates to an increase/decrease of 100 basis points.
17.6Executive compensation plan
The Company currently has a compensation plan with the purpose of motivating the Company’s executives and encouraging them to remain with the Company. There are two compensation plans in effect as of December 31, 2022:
I) | Share-based compensation plan |
Plan established for the 2017-2022 period for granting payments based on the change in the price of company shares. The benefit program includes a partial payment in shares where a contract is terminated for causes different from resignation and the application of Article 160 of the Labor Code.
(a) | Plan characteristics |
This compensation plan is related to the Company’s performance through the SQM Series B share price (Santiago Stock Exchange).
(b) | Plan participants and payment dates |
The compensation plan considers 29 Company’s executives, who are entitled to this benefit, provided that they stay with the Company until a given date, recognizing on an accrual basis: i) a 2021 bonus, which will be made effective by paying
(c) | Compensation |
The compensation payable to each executive is calculated by multiplying:
i) | the average price of the series B shares on the Santiago Stock Exchange during the fourth quarter of 2020, in its US dollar equivalent (with a value of US$ |
ii) | the average price of SQM’s series B shares during the final quarter of 2022, subject to a limit of US$ |
F-94
iii) | by a number equal to the quantity of shares that have been individually assigned to each executive included in the plan. |
The current compensation plan was approved by the Board and includes
II) | Financial target compensation plan |
(a) | Plan characteristics |
This is a cash compensation plan linked to the Company’s attainment of specific financial targets.
(b) | Plan participants and payment dates |
A total of 42 Company executives are entitled to this benefit, provided they remain with the Company until year end of 2025. The payment dates, where relevant, will be during the first quarter of 2026.
This compensation plan was approved by the Board and was first applied on January 1, 2022. Expenditure for the period corresponds to ThUS$
Note 18 Provisions and other non-financial liabilities
18.1Types of provisions
| As of December 31, 2022 |
| As of December 31, 2021 | |||||||||
Types of provisions |
| Current |
| Non-current |
| Total |
| Current |
| Non-current |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Provision for legal complaints (1) | |
| |
| | |
| |
| | ||
Provision for dismantling, restoration and rehabilitation cost (2) | |
| |
| | |
| |
| | ||
Other provisions (3) | |
| |
| | |
| |
| | ||
Total | |
| |
| | |
| |
| |
(1) | These provisions correspond to legal processes that are pending resolution or that have not yet been disbursed, these provisions are mainly related to litigation involving the subsidiaries located in Chile, Brazil and the United States (see note 20.1). |
(2) | Sernageomin commitments for the restoration of the location of the production sites have been incorporated. This cost value is calculated at discounted present value, using flows associated with plans with an evaluation horizon that fluctuates between |
(3) | See Note 18.2. |
F-95
18.2 Description of other provisions
| As of |
| As of | |
December 31, | December 31, | |||
Current provisions, other short-term provisions | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Rent under Lease contract (1) |
| |
| |
Provision for additional tax related to foreign loans |
| |
| |
End of agreement bonus |
| |
| |
Directors’ per diem allowance |
| |
| |
Miscellaneous provisions |
| |
| |
Total |
| |
| |
(1) | Payment Obligations for the lease contract with Corfo: These correspond to obligations assumed in the Lease Agreement. Our subsidiary SQM Salar holds exclusive rights to exploit the mineral resources in an area covering approximately |
The agreement signed in January 2018, includes important amendments to the lease agreement and project agreement signed between Corfo and SQM in 1993. The main modifications became effective on April 10, 2018 and requires an increase in the lease payments by increasing the lease rates associated with the sale of the different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. This agreement has been amended since it was signed, and it is reasonable to expect that it will continue to be amended as mutually agreed by the parties.
Additionally, SQM Salar commits to contribute to research and development efforts, as well as to the communities in close proximity to the Salar de Atacama and provide a percentage of total annual sales of SQM Salar to regional development.
SQM Salar commits to contribute between US$
18.3 Changes in provisions
|
| Provision for |
|
| ||||
dismantling, | ||||||||
Description of items that gave rise to variations | restoration and | |||||||
as of December 31, 2022 | Legal complaints | rehabilitation cost | Other provisions | Total | ||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||
Total provisions, initial balance |
| |
| |
| |
| |
Changes |
|
|
|
|
|
|
|
|
Additional provisions |
| |
| |
| |
| |
Provision used |
| — |
| — |
| ( |
| ( |
Increase(decrease) in foreign currency exchange |
| ( |
| ( |
| |
| ( |
Others |
| ( |
| ( |
| ( |
| ( |
Total Increase (decreases) |
| |
| ( |
| |
| |
Total |
| |
| |
| |
| |
F-96
|
| Provision for |
|
| ||||
dismantling, | ||||||||
Description of items that gave rise to variations | restoration and | |||||||
as of December 31, 2021 | Legal complaints | rehabilitation cost | Other provisions | Total | ||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||
Total provisions, initial balance |
| |
| |
| |
| |
Changes |
|
|
|
|
|
|
|
|
Additional provisions |
| |
| |
| |
| |
Provision used |
| ( |
| — |
| ( |
| ( |
Increase(decrease) in foreign currency exchange |
| ( |
| — |
| ( |
| ( |
Others |
| — |
| ( |
| ( |
| ( |
Total Increase (decreases) |
| |
| ( |
| |
| |
Total |
| |
| |
| |
| |
|
| Provision for |
|
| ||||
dismantling, | ||||||||
Description of items that gave rise to variations | restoration and | |||||||
as of December 31, 2020 | Legal complaints | rehabilitation cost | Other provisions | Total | ||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||
Total provisions, initial balance |
| |
| |
| |
| |
Changes |
|
|
|
|
|
|
|
|
Additional provisions |
| |
| |
| |
| |
Provision used |
| ( |
| — |
| ( |
| ( |
Increase(decrease) in foreign currency exchange |
| |
| — |
| ( |
| ( |
Others |
| — |
| ( |
| — |
| ( |
Total Increase (decreases) |
| ( |
| |
| ( |
| |
Total |
| |
| |
| |
| |
18.4 Other non-financial liabilities, Current
| As of |
| As of | |
December 31, | December 31, | |||
Description of other liabilities | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Tax withholdings |
| |
| |
VAT payable |
| |
| |
Guarantees received |
| |
| |
Accrual for dividend |
| |
| |
Monthly tax provisional payments |
| |
| |
Deferred income |
| |
| |
Withholdings from employees and salaries payable |
| |
| |
Accrued vacations (1) |
| |
| |
Other current liabilities |
| |
| |
Total |
| |
| |
(1) Vacation benefit (short-term benefits to employees, current) is in line with the provisions established in Chile’s Labor Code, which indicates that employees with more than a year of service will be entitled to annual vacation for a period of at least fifteen paid business days. The Company provides the benefit of two additional vacation days
Note 19 Disclosures on equity
The detail and movements in the funds of equity accounts are shown in the consolidated statement of changes in equity.
19.1Capital management
The main object of capital management relative to the administration of the Company’s financial debt and equity is to ensure the regular conduct of operations and business continuity in the long term, with the constant intention of maintaining an adequate level of liquidity and in compliance with the financial safeguards established in the debt contracts in force. Within this framework, decisions are made in order to maximize the value of the company.
F-97
Capital management must comply with, among others, the limits contemplated in the Financing Policy approved by the Shareholders’ Meeting, which establish a maximum consolidated indebtedness level of 1.5 times the debt to equity ratio. This limit can be exceeded only if the Company’s management has first obtained express approval at an Extraordinary Shareholders’ Meeting.
The Company’s management controls capital management based on the following ratios:
| As of December 31, |
| As of December 31, |
|
| |||
Capital Management | 2022 | 2021 | Description (1) | Calculation (1) | ||||
Net Financial Debt (ThUS$) |
| ( |
| |
|
| ||
Liquidity |
| |
| |
|
| ||
ROE |
| | % | | % |
| ||
Adjusted EBITDA (ThUS$) |
| |
| |
|
| ||
EBITDA (ThUS$) |
| |
| |
|
| ||
ROA |
| | % | | % |
| ||
Indebtedness |
| ( |
| |
|
|
The Company’s capital requirements change according to variables such as: working capital needs, new investment financing and dividends, among others. The SQM Group manages its capital structure and makes adjustments bases on the predominant economic conditions so as to mitigate the risks associated with adverse market conditions and take advantage of the opportunities there may be to improve the liquidity position of the SQM Group.
There have been no changes in the capital management objectives or policy within the years reported in this document, no breaches of external requirements of capital imposed have been recorded. There are
19.2Operational restrictions and financial limits
Bond issuance contracts in the local market require the Company to maintain a Total Borrowing Ratio no higher than 1 for Series H, Series O and Series Q bonds, calculated over the last consecutive 12 months.
Capital management must ensure that the Borrowing Ratio remains below 1.0, with respect to the Series H, Series O and Series Q bonds. This ratio was redefined at the Bondholders’ Meeting held in September 2020, as the result of dividing Net Financial Debt by the company’s Total Equity. Previously it had been defined as Total Liabilities divided by Equity, and the limit for this ratio was 1.44, with a prepayment option for bondholders if this ratio rose above 1.2. As of December 31, 2022 and 2021 this ratio was (0.15).
F-98
The financial restrictions with respect to the bonds issued by the Company for the periods ended December 31, 2022 and 2021 are as follows.
| Financial restrictions (member) | |||||||
| Financial |
| Financial |
| Financial |
| Financial | |
restrictions | restrictions | restrictions | restrictions | |||||
As of December 31, 2022 | (member) | (member) | (member) | (member) | ||||
Instrument with restriction |
|
|
| |||||
Reporting party or subsidiary restriction |
|
|
|
|
|
|
| |
Creditor |
|
|
| |||||
Registration number |
|
|
| |||||
Name of financial indicator or ratio (See definition in Note 20.1) |
|
|
| |||||
Measurement frequency |
|
|
| |||||
Restriction (Range, value and unit of measure) |
|
|
| |||||
Indicator or ratio determined by the company | - |
| - |
| - |
| - | |
Fulfilled YES/NO |
|
|
|
Financial restrictions (member) | ||||||||
Financial | Financial | Financial | Financial | |||||
restrictions | restrictions | restrictions | restrictions | |||||
As of December 31, 2021 |
| (member) |
| (member) |
| (member) |
| (member) |
Instrument with restriction |
|
|
| |||||
Reporting party or subsidiary restriction |
|
|
|
|
|
|
| |
Creditor |
|
|
| |||||
Registration number |
|
|
| |||||
Name of financial indicator or ratio (See definition in Note 20.1) |
|
|
| |||||
Measurement frequency |
|
|
| |||||
Restriction (Range, value and unit of measure) |
|
|
| |||||
Indicator or ratio determined by the company |
|
|
| |||||
Fulfilled YES/NO |
|
|
|
Bond issuance contracts in foreign markets require that the Company does not merge, or dispose of, or encumber all or a significant portion of its assets, unless all of the following conditions are met: (i) the legal successor is an entity constituted under the laws of Chile or the United States, which assumes all the obligations of the Company in a supplemental indenture, (ii) immediately after the merger or disposal or encumbrance there is no default by the issuer, and (iii) the issuer has provided a legal opinion indicating that the merger or disposal or encumbrance and the supplemental indenture comply with the requirements of the original indenture.
The Company is also committed to provide quarterly financial information.
The Company and its subsidiaries are complying with all the aforementioned limitations, restrictions and obligations.
19.3Disclosures on share capital
Issued share capital is divided into Series A shares and Series B shares. All such shares are nominative, have no par value and are fully issued, subscribed and paid.
Series B shares may not exceed
(a) | require the calling of an Ordinary or Extraordinary Shareholders’ Meeting when so requested by Series B shareholders representing at least 5% of the issued shares thereof; and |
(b) | require the calling of an extraordinary meeting of the board of directors, without the president being able to qualify the need for such a request, when so requested by the director who has been elected by the shareholders of said Series B. |
F-99
The limitation and preferences of Series B shares have a duration of
The Series A shares have the preference of being able to exclude the director elected by the Series B shareholders in the voting process in which the president of the board of directors and of the Company must be elected and which follows the one in which the tie that allows such exclusion resulted.
The preference of the Series A shares will have a term of
At December 31, 2022, the Group hold 648 Series A shares treasury shares.
Detail of capital classes in shares:
As of December 31, 2022, the Company has placed share issues in the market as described in note 1.6:
As of December 31, 2022 | As of December 31, 2021 |
| As of December 31, 2020 | |||||||||
Type of capital in preferred shares |
| Series A |
| Series B |
| Series A |
| Series B |
| Series A |
| Series B |
Description of type of capital in shares |
|
|
|
|
|
|
|
|
|
|
| |
Number of authorized shares |
| |
| |
| |
| | |
| | |
Number of fully subscribed and paid shares |
| |
| |
| |
| | |
| | |
Number of subscribed, partially paid shares |
| — |
| — |
| — |
| — | — |
| — | |
Increase (decrease) in the number of current shares |
| — |
| — |
| — |
| — | — |
| — | |
Number of outstanding shares |
| |
| |
| |
| | |
| | |
Number of shares owned by the Company or its subsidiaries or associates |
| |
| — |
| |
| — | — |
| — | |
Number of shares whose issuance is reserved due to the existence of options or agreements to dispose shares |
| — |
| — |
| — |
| — | — |
| — | |
Capital amount in shares ThUS$ |
| | |
| | | ||||||
Total number of subscribed shares |
| |
| |
| |
| | |
| |
19.4Disclosures on reserves in Equity and non-controlling interests
As of December 31, 2022, 2021 and 2020, this caption comprises the following:
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Disclosures on reserves in equity | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Reserve for currency exchange conversion (1) |
| ( |
| ( |
| ( |
Reserve for cash flow hedges (2) |
| ( |
| ( |
| |
Reserve for gains and losses from financial assets measured at fair value through other comprehensive income (3) |
| ( |
| ( |
| |
Reserve for actuarial gains or losses in defined benefit plans (4) |
| ( |
| ( |
| ( |
Other reserves |
| |
| |
| |
Total |
| ( |
| ( |
| |
(1) | This balance reflects retained earnings for changes in the exchange rate when converting the financial statements of subsidiaries whose functional currency is different from the US dollar. |
(2) | The Company maintains, as hedge instruments, financial derivatives related to obligations with the public issued in UF and Chilean pesos, Changes from the fair value of derivatives designated and classified as hedges are recognized under this classification. |
(3) | This caption includes the fair value of equity investments that are not held for trading and that the group has irrevocably opted to recognize in this category upon initial recognition. In the event that such equity instruments are fully or partially disposed of, the proportional accumulated effect of accumulated fair value will be transferred to retained earnings. |
F-100
(4) | This caption reflects the effects of changes in actuarial assumptions, mainly changes in the discount rate. |
Movements in other reserves and changes in interest were as follows:
Foreign | Reserve for gains (losses) | |||||||||||||||||||||
currency | from financial assets | |||||||||||||||||||||
translation | Reserve for actuarial gains | measured at fair value | ||||||||||||||||||||
difference | Reserve for cash flow | and losses from defined | through other | Other | ||||||||||||||||||
(1) | hedges | benefit plans | comprehensive income | reserves | Total reserves | |||||||||||||||||
| Before |
| Before |
|
| Before |
| Deferred |
| Before |
| Deferred |
| Before |
|
| Deferred |
| Total | |||
Movements | taxes | taxes | Tax | taxes | taxes | Taxes | taxes | taxes | Reserves | taxes | reserves | |||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||||||||
Opening balance as of January 1, 2020 |
| ( |
| |
| ( |
| ( |
| |
| |
| ( |
| |
| ( |
| ( |
| ( |
Movement of reserves |
| ( |
| ( |
| |
| |
| ( |
| |
| ( |
| |
| |
| ( |
| |
Reclassification adjustments |
| |
| ( |
| — |
| — |
| — |
| — |
| — |
| ( |
| |
| — |
| |
Closing balance as of December 31, 2020 |
| ( |
| |
| ( |
| ( |
| |
| |
| ( |
| |
| |
| ( |
| |
Movement of reserves |
| |
| ( |
| |
| |
| ( |
| ( |
| |
| |
| ( |
| |
| ( |
Reclassification adjustments |
| ( |
| |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( |
| — |
| ( |
Reclassification to retained earnings |
| — |
| — |
| — |
| — |
| — |
| ( |
| |
| — |
| ( |
| |
| ( |
Closing balance as of December 31, 2021 |
| ( |
| ( |
| |
| ( |
| |
| ( |
| |
| |
| ( |
| |
| ( |
Movement of reserves |
| ( |
| |
| ( |
| ( |
| |
| |
| ( |
| ( |
| |
| ( |
| |
Reclassification adjustments |
| — |
| ( |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( |
| — |
| ( |
Reclassification to retained earnings |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
Closing balance as of December 31, 2022 |
| ( |
| ( |
| |
| ( |
| |
| ( |
| |
| |
| ( |
| |
| ( |
(1) | See details on reserves for foreign currency translation differences on conversion in Note 23, letter b). |
Other reserves
This caption corresponds to the legal reserves reported in the stand-alone financial statements of the subsidiaries and associates that are mentioned below and that have been recognized in SQM’s equity through the application of the equity method.
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Subsidiary – Associate | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
SQM Iberian S.A. |
| |
| |
| |
SQM Europe NV |
| |
| |
| |
Soquimich European holding B.V. |
| |
| |
| |
Abu Dhabi Fertilizer Industries WWL |
| |
| |
| |
Kore Potash PLC | | | | |||
Soquimich Comercial S.A. |
| ( |
| |
| |
SQM Vitas Fzco. |
| |
| ( |
| ( |
Pavoni & C. Spa |
| |
| |
| |
SQM Iberian S.A. |
| ( |
| ( |
| ( |
Orcoma Estudios SPA |
| |
| |
| |
SQM Industrial S.A. |
| |
| |
| |
Others |
| ( |
| ( |
| |
Total Other reserves |
| |
| |
| |
F-101
Non-controlling interests
% of interests in the | Profit (loss) attributable to non-controlling interests for the year ended | Equity, non-controlling interests for the year ended | Dividends paid to non-controlling interests for the year ended | |||||||||||
| ownership held by non- |
| As of |
| As of | As of | As of | As of | As of | |||||
Subsidiary | controlling interests | December 31, 2022 |
| December 31, 2021 | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
SQM Potasio S.A. |
|
| | | | | | | ||||||
Ajay SQM Chile S.A. |
|
| | | ||||||||||
Soquimich Comercial S.A. | | | ||||||||||||
Comercial Agrorama Ltda. | | | | ( | | | ||||||||
SQM Indonesia S.A. | | | | | | | ||||||||
SQM Thailand Limited | | | | | | | ||||||||
Total | | | | | | |
19.5Dividend policies
As required by Article 79 of the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued and subscribed shares, a publicly traded corporation must annually distribute a cash dividend to its shareholders, prorated based on their shares or the proportion established in the company’s bylaws if there are preferred shares, with at least
Dividend policy for commercial year 2022
Company’s dividend policy for the 2022 business year was agreed upon by the Board of Directors on April 26, 2022. On that occasion, the following was decided:
(a) | Distribute and pay to the corresponding shareholders, a percentage of the net income that shall be determined per the following financial parameters as a final dividend: |
(i) | 100% of the profit for 2022 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 2.5 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 0.8 times. |
(ii) | 80% of the profit for 2022 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 2.0 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 0.9 times. |
(iii) | 60% of the profit for 2022 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 1.5 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 1.0 times. |
(iv) | If none of the foregoing financial parameters are met, the Company shall distribute and pay, as a final dividend, and in favor of the respective shareholders, 50% of the 2022 net income. |
(b) | Distribute and pay in 2022 interim dividends, which will be charged to the aforementioned final dividend. |
(c) | The amount of the provisional dividends may be higher or lower, provided that, based on the information available to the Board of Directors on the date when their distribution is agreed to, this will not have a negative or material effect on the Company's ability to carry out its investments, meet its obligations, and in general to comply with the investment and financing policy approved by the Ordinary Shareholders’ Meeting. |
F-102
(d) | At the ordinary meeting to be held in 2023, the Company's Board of Directors will propose a final dividend in line with the percentage corresponding to the financial parameters outlined in (a) above, discounting the provisional dividends previously distributed in 2022. |
(e) | Any remaining amount from the net profits from 2022 can be retained and used to finance the Company’s own operations or one or more of its investment projects, notwithstanding a possible distribution of dividends charged to accumulated profit that might be approved by the shareholders’ meeting or the possible future capitalization of all or part of it. |
(f) | The payment of additional dividends is not being considered. |
It must be expressly stated that this dividends policy details the intention of the Company’s Board of Directors and its fulfillment depends on the actual profits obtained, as well as on the results indicated by the projections the Company makes from time to time or on the existence of particular conditions, as appropriate. In any case, if the dividend policy set forth by the Board of Directors should undergo any substantial change, the Company must communicate it as a material event.
19.6Interim and provisional dividends
On April 26, 2022, the Board of Directors agreed to pay a final dividend equivalent to US$
On May 18, 2022, the Board agreed to pay an interim dividend equal to US$
On August 17, 2022, the Board agreed to pay an interim divided equal to US$
On November 21, 2022, the Board of Directors agreed to pay an interim dividend equivalent to US$
19.7Potential and provisional dividends
Dividends discounted from equity from January to December 2022 and 2021 were the following:
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Dividends | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Interim dividend |
| |
| |
| |
Special dividend |
| |
| |
| |
Dividends payable |
| |
| |
| |
Owners of the Parent |
| |
| |
| |
Special dividend |
| |
| |
| |
Dividends according to policy |
| |
| |
| |
Non-controlling interests |
| |
| |
| |
Dividends discounted from equity for the period |
| |
| |
| |
F-103
Note 20 Contingencies and restrictions
In accordance with note 18.1, the Company recognizes a provision for those lawsuits in which there is a probability that the judgments will be unfavorable to the Company. The Company is party to the following lawsuits and other relevant legal actions:
20.1Lawsuits and other relevant events
(a) | In August 1996, Nitratos Naturais do Chile Ltda. was fined by Fazenda do Estado de Sao Paulo for concluding activities without attaching the necessary documentation for submission to the competent authorities. The treasury of the State of Sao Paulo initiated legal actions to collect close to ThUS$ |
(b) | In August 2004, Nitratos Naturais do Chile Ltda. was fined by Fazenda do Estado de Sao Paulo for failing to report trade activities. The treasury of the State of Sao Paulo initiated legal actions to collect close to ThUS$ |
(c) | In |
(d) | In |
(e) | In |
(f) | In |
(g) | In |
(h) |
(i) | The Company has initiated an arbitration process against the company |
F-104
filed counterclaims against the Company. The counterclaims filed against |
(j) | Through resolution dated April 14, 2020, the General Water Bureau (DGA) fined SQM Salar S.A. an amount of |
(k) | On January 7, 2021, the Company Ocaña y Vega Limited has requested arbitration against the Company to claim compensation for damages associated with the early termination of two construction contracts. The case has reached the evidence gathering stage. The cost of arbitration is valued at approximately ThUS$ |
(l) | On April 6, 2021, Empresa Eléctrica Cochrane SpA requested the constitution of arbitration to resolve a dispute in relation to electricity supply contracts signed on March 30, 2012, and February 1, 2013. The trial is currently in the discussion stage. On January 17, 2022, the Company filed a claim for early termination of the electricity supply contracts against Empresa Eléctrica Cochrane SpA. at the same arbitration tribunal. The discussion. Both trials have reached the evidence stage. |
(m) | In October 2021, the Company requested the constitution of an arbitration against Chilena Consolidada Seguros Generales S.A. to resolve differences in relation to the interpretation and execution of the directors’ and officers’ liability insurance policy. The lawsuit has been notified to the arbitrator. |
(n) | In February 2022, the company Montajes Eléctricos y Construcciones RER Limitada filed a claim for damages before the 21st Civil Court of Santiago against SQM Industrial S.A. for its alleged liability derived from the breach of an electrical installation contract. The case is still in the discussion stage. The amount of the lawsuit is approximately ThUS$ |
(o) | In June 2022, Mrs. Lorena Saa Nuñez and others filed a lawsuit against the Company with the Labor Court of Pozo Almonte seeking compensation for damages moral damages and lost profits resulting from the death of worker Oscar Muñoz Meza. The case has reached the ruling stage. The lawsuit is for approximately ThUS$ |
The Company and its subsidiaries have been involved and will probably continue to be involved either as plaintiffs or defendants in certain judicial proceedings that have been and will be heard by the arbitration or ordinary courts of justice that will make the final decision. Those proceedings that are regulated by the appropriate legal regulations are intended to exercise or oppose certain actions or exceptions related to certain mining claims either granted or to be granted and that do not or will not affect in an essential manner the development of the Company and its subsidiaries.
Soquimich Comercial S.A. has been involved and will probably continue being involved either as plaintiff or defendant in certain judicial proceedings through which it intends to collect and receive the amounts owed, the total nominal value of which is approximately US$
The Company and its subsidiaries have made efforts and continues making efforts to obtain payment of certain amounts that are still owed to the Company due to its activities. Such amounts will continue to be required using judicial or non-judicial means by the plaintiffs, and the actions and exercise related to these are currently in full force and effect.
20.2Environmental contingencies
The SMA issued a resolution dated November 28, 2016, rectified by a resolution dated December 23, 2016, which filed charges against SQM Salar for brine extraction in excess of authorized amounts, progressive impairment of the vitality of carob trees, providing incomplete information modification of follow-up plan variables, and other charges. SQM Salar S.A. presented a compliance program that was accepted by the SMA. On December 2019, the Environmental Court of Antofagasta rendered the accepted compliance program null. In October 2020, the SMA formulated new observations for the compliance program, which will enable the incorporation of improvements in line with the ruling of the Environmental Court of Antofagasta, to then make a determination regarding approval or rejection. If a new compliance program is not
F-105
approved by the SMA, or if approved and legally challenged and rendered null and void by the Chilean courts, the sanction process against SQM Salar could be resumed. This latter event may consider the application of fines up to MUS$
20.3Tax Contingencies
SQM Salar has filed three tax claims against the SII for taxes levied between tax years 2012 and 2018 (business years 2011 to 2017). The SII has sought to broaden the application of the specific tax on mining activities to the extraction of lithium, a substance that is not concessionable by law. The amount associated with these processes totals US$
The details of the claims can be found below:
(a) | On August 26, 2016, a tax claim was filed with the Third Tax and Customs Court of the Metropolitan Region against tax assessments No. 169, 170, 171 and 172 for tax years 2012 to 2014. The amount in dispute is US$ |
(b) | On March 24, 2017, a tax claim was filed with the Third Tax and Customs Court of the Metropolitan Region against tax assessment No. 207 and resolution No. 156, both issued by the SII, for tax years 2015 to 2016. The amount in dispute is US$ |
(c) | On July 15, 2021, SQM Salar filed a public right annulment suit and tax claim with the First Tax and Customs Court of the Metropolitan Region against tax assessments No. 65 and 66 for the 2017 and 2018 tax years. The amount in dispute is US$ |
On September 29, 2022, the SII assessed the differences for the 2019 tax year with respect to specific mining tax and other adjustments that totalled US$
To date, the Company has recorded no effect corresponding to this tax on its profit and loss.
20.4Contingencies regarding to the Contracts with Corfo
On September 6, 2018, representatives Claudia Nathalie Mix Jiménez, Gael Fernanda Yeomans Araya and Camila Ruslay Rojas Valderrama and the Poder Ciudadano political party filed an annulment suit against Corfo, which requested that the Salar de Atacama Project Agreement between Corfo and the Company, SQM Potasio and SQM Salar be annulled. The Companies have taken part of the process as interested third parties.
F-106
In the event that the annulment claim is approved for the Salar de Atacama Project Agreement, SQM Salar may be prevented from the exploitation of the mining assets in the Salar de Atacama that it has leased from Corfo.
20.5Restricted or pledged cash
The subsidiary Isapre Norte Grande Ltda., in compliance with the provisions established by the Chilean Superintendence of Healthcare, which regulates the running of pension-related health institutions, maintains a guarantee in financial instruments delivered in deposits, custody and administration to Banco de Chile.
This guarantee, according to the regulations issued by the Chilean Superintendence of Healthcare is equivalent to the total amount owed to its members and medical providers, Banco de Chile reports the present value of the guarantee to the Chilean Superintendence of Healthcare and Isapre Norte Grande Ltda on a daily basis. As of December 31, 2022, the guarantee amounts to ThUS$
20.6Indirect guarantees
As of December 31, 2022 and 2021, there are no indirect guarantees.
Note 21 Gains (losses) from operating activities in the statement of income of expenses, included according to their nature
21.1Revenue from operating activities customer activities
The Group derives revenues from the sale of goods (which are recognized at one point in time) and from the provision of services (which are recognized over time) and are distributed among the following geographical areas and main product and service lines:
(a) | Geographic areas: |
For the year ended December 31, 2022 | ||||||||||||||
Specialty | ||||||||||||||
plant | Iodine and | Lithium and | Industrial | Total | ||||||||||
Geographic areas |
| nutrition |
| derivatives |
| derivatives |
| Potassium |
| chemicals |
| Other |
| ThUS$ |
Chile | | | | | | | | |||||||
Latin America and the Caribbean | | | | | | | | |||||||
Europe |
| |
| |
| |
| |
| |
| |
| |
North America |
| |
| |
| |
| |
| |
| |
| |
Asia and Others |
| |
| |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
| |
| |
| |
For the year ended December 31, 2021 | ||||||||||||||
Specialty | ||||||||||||||
plant | Iodine and | Lithium and | Industrial | Total | ||||||||||
Geographic areas |
| nutrition | derivatives |
| derivatives |
| Potassium |
| chemicals |
| Other |
| ThUS$ | |
Chile | | | | | | | | |||||||
Latin America and the Caribbean | | | | | | | | |||||||
Europa |
| |
| |
| |
| |
| |
| |
| |
North America |
| |
| |
| |
| |
| |
| |
| |
Asia and Others |
| |
| |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
| |
| |
| |
F-107
For the year ended December 31, 2020 | ||||||||||||||
Specialty | ||||||||||||||
plant | Iodine and | Lithium and | Industrial | Total | ||||||||||
Geographic areas |
| nutrition |
| derivatives |
| derivatives |
| Potassium |
| chemicals |
| Other |
| ThUS$ |
Chile | | | | | | | | |||||||
Latin America and the Caribbean | | | | | | | | |||||||
Europa |
| |
| |
| |
| |
| |
| |
| |
North America |
| |
| |
| |
| |
| |
| |
| |
Asia and Others |
| |
| |
| |
| |
| |
| |
| |
Total |
| |
| |
| |
| |
| |
| |
| |
(b) | Main product and service lines: |
For the period from January to December of the year | ||||||
Products and Services |
| 2022 |
| 2021 |
| 2020 |
| ThUS$ | ThUS$ | ThUS$ | |||
Specialty plant nutrition |
| |
| |
| |
- Sodium Nitrates |
| |
| |
| |
- Potassium nitrate and sodium potassium nitrate |
| |
| |
| |
- Specialty Blends |
| |
| |
| |
- Other specialty fertilizers |
| |
| |
| |
Iodine and derivatives |
| |
| |
| |
Lithium and derivatives |
| |
| |
| |
Potassium |
| |
| |
| |
Industrial chemicals |
| |
| |
| |
Other |
| |
| |
| |
- Services |
| |
| |
| |
- Income from property leases |
| |
| |
| |
- Income from subleases on right-of-use assets |
| |
| |
| |
- Commodities |
| |
| |
| |
- Other ordinary income of Commercial Offices |
| |
| |
| |
Total |
| |
| |
| |
21.2Cost of sales
Cost of sales broken down by nature of expense:
For the period from January | ||||||
to December of the year | ||||||
Nature of expense |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Raw materials and consumables used | ( | ( | ( | |||
Classes of employee benefit expenses |
| ( |
| ( |
| ( |
Depreciation expense |
| ( |
| ( |
| ( |
Depreciation of Right-of-use Assets (contracts under IFRS 16) |
| ( |
| ( |
| ( |
Amortization expense |
| ( |
| ( |
| ( |
Investment plan expenses |
| ( |
| ( |
| ( |
Provision for materials, spare parts and supplies |
| ( |
| ( |
| |
Contractors |
| ( |
| ( |
| ( |
Operating leases |
| ( |
| ( |
| ( |
Mining concessions |
| ( |
| ( |
| ( |
Operational transportation |
| ( |
| ( |
| ( |
Freight / product transportation costs |
| ( |
| ( |
| ( |
Purchase of products from third parties |
| ( |
| ( |
| ( |
Insurance |
| ( |
| ( |
| ( |
Corfo rights and other agreements |
| ( |
| ( |
| ( |
Export costs |
| ( |
| ( |
| ( |
Expenses related to variable lease payments (contracts under IFRS 16) |
| ( |
| ( |
| ( |
Variation in gross inventory |
| |
| |
| |
Variation in inventory provision |
| ( |
| |
| |
Other |
| ( |
| |
| |
Total |
| ( |
| ( |
| ( |
F-108
21.3Other income
For the period from January | ||||||
to December of the year | ||||||
Other income |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Discounts obtained from suppliers | | | | |||
Fines charged to suppliers |
| |
| |
| |
Taxes recovered |
| |
| |
| |
Amounts recovered from insurance |
| |
| |
| |
Overestimate of provisions for third-party obligations |
| |
| |
| |
Sale of assets classified as properties, plant and equipment |
| |
| |
| |
Sale of mining rights |
| |
| |
| |
Easements, pipelines and roads |
| |
| |
| |
Refunds for mining patents and notarial expenses |
| |
| |
| |
Others |
| |
| |
| |
Total |
| |
| |
| |
21.4Administrative expenses
For the period from January | ||||||
to December of the year | ||||||
Administrative expenses |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Employee benefit expenses | ( | ( | ( | |||
Marketing costs |
| ( |
| ( |
| ( |
Amortization expenses |
| ( |
| ( |
| ( |
Entertainment expenses |
| ( |
| ( |
| ( |
Advisory services |
| ( |
| ( |
| ( |
Lease of buildings and facilities |
| ( |
| ( |
| ( |
Insurance |
| ( |
| ( |
| ( |
Office expenses |
| ( |
| ( |
| ( |
Contractors |
| ( |
| ( |
| ( |
Depreciation of Right-of-use Assets (contracts under IFRS 16) |
| ( |
| ( |
| ( |
Other expenses |
| ( |
| ( |
| ( |
Total |
| ( |
| ( |
| ( |
21.5Other expenses
For the period from January | ||||||
to December of the year | ||||||
Other expenses |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Depreciation and amortization expense |
|
|
| |||
Depreciation of assets not in use |
| |
| |
| ( |
Subtotal |
| |
| |
| ( |
Impairment (losses) /reversals of impairment losses recognized in profit for the year |
|
|
|
|
|
|
Properties, plant and equipment |
| ( |
| ( |
| ( |
Intangible assets other than goodwill |
| ( |
| ( |
| ( |
Goodwill |
| ( |
| |
| ( |
Non-current assets and disposal groups held for sale |
| |
| |
| |
Subtotal |
| ( |
| ( |
| ( |
Other expenses, by nature |
|
|
|
|
|
|
Legal expenses |
| ( |
| ( |
| ( |
VAT and other unrecoverable taxes |
| ( |
| ( |
| ( |
Fines paid |
| ( |
| ( |
| ( |
Investment plan expenses |
| ( |
| |
| ( |
Exploration expenses |
| |
| ( |
| ( |
Contributions and donations |
| ( |
| ( |
| ( |
Other operating expenses |
| ( |
| ( |
| ( |
Subtotal |
| ( |
| ( |
| ( |
Total |
| ( |
| ( |
| ( |
F-109
21.6Other gains (losses)
For the period from January | ||||||
to December of the year | ||||||
Other (losses) income |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Sale of investments in associates |
| |
| |
| ( |
Adjust previous year application method of participation | | | ( | |||
Impairment of interests in associates |
| |
| ( |
| |
Sale of investments in joint ventures |
| |
| |
| ( |
Others |
| ( |
| ( |
| ( |
Total |
| |
| ( |
| ( |
21.7(Impairment) reversal of losses of financial assets
For the period from January | ||||||
to December of the year | ||||||
(Impairment) reversal of losses of financial assets |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
(Impairment) /reversal of losses of financial assets (See Note 12.2) |
| |
| ( |
| |
Totals |
| |
| ( |
| |
21.8Summary of expenses by nature
The following summary considers notes 21.2, 21.4 and 21.5
For the period from January | ||||||
to December of the year | ||||||
Expenses by nature |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Raw materials and consumables |
| ( |
| ( |
| ( |
Employee benefit expenses |
| ( |
| ( |
| ( |
Depreciation expense |
| ( |
| ( |
| ( |
Depreciation of right-of-use assets |
| ( |
| ( |
| ( |
Impairment of properties, plant and equipment, intangible and Goodwill |
| ( |
| ( |
| ( |
Amortization expense |
| ( |
| ( |
| ( |
Legal expenses |
| ( |
| ( |
| ( |
Investment plan expenses |
| ( |
| ( |
| ( |
Exploration expenses |
| |
| ( |
| ( |
Provision for materials, spare parts and supplies |
| ( |
| ( |
| |
Contractors |
| ( |
| ( |
| ( |
Operational leases |
| ( |
| ( |
| ( |
Mining concessions |
| ( |
| ( |
| ( |
Operational transportation |
| ( |
| ( |
| ( |
Freight and product transportation costs |
| ( |
| ( |
| ( |
Purchase of products from third parties |
| ( |
| ( |
| ( |
Corfo rights and other agreements |
| ( |
| ( |
| ( |
Export costs |
| ( |
| ( |
| ( |
Expenses related to variable lease payments (contracts under IFRS 16) |
| ( |
| ( |
| ( |
Insurance |
| ( |
| ( |
| ( |
Consultant and advisor services |
| ( |
| ( |
| ( |
Variation in gross inventory |
| |
| |
| |
Variation in inventory provision |
| ( |
| |
| |
Other expenses |
| ( |
| ( |
| ( |
Total expenses by nature |
| ( |
| ( |
| ( |
F-110
21.9Finance expenses
For the period from January | ||||||
to December of the year | ||||||
Finance expenses |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Interest expense from bank borrowings and overdrafts |
| ( |
| ( |
| ( |
Interest expense from bonds |
| ( |
| ( |
| ( |
Interest expense from loans |
| ( |
| ( |
| ( |
Reversal of capitalized interest expenses |
| |
| |
| |
Financial expenses for restoration and rehabilitation provisions |
| |
| ( |
| |
Interest on lease agreement |
| ( |
| ( |
| ( |
Interest and bank charges |
| ( |
| ( |
| ( |
Total |
| ( |
| ( |
| ( |
21.10Finance income
For the period from January | ||||||
to December of the year | ||||||
Finance income |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Interest from term deposits |
| |
| |
| |
Interest from marketable securities |
| |
| |
| |
Interest from maintenance of minimum bank balance in current account |
| |
| |
| |
Other finance income |
| |
| |
| |
Other finance interests |
| |
| |
| |
Total |
| |
| |
| |
22.1Reportable segments
(a) | General information: |
The amount of each item presented in each operating segment is equal to that reported to the highest authority that makes decisions regarding the operation, in order to decide on the allocation of resources to the defined segments and to assess its performance.
These operating segments mentioned are consistent with the way the Company is managed and how results will be reported by the Company. These segments reflect separate operating results that are regularly reviewed by the executive responsible for operational decisions in order to make decisions about the resources to be allocated to the segment and assess its performance (See Note 22.2).
The performance of each segment is measured based on net income and revenues. Inter-segment sales are made using terms and conditions at current market rates.
(b) | Factors used to identify segments on which a report should be presented: |
The segments covered in the report are strategic business units that offer different products and services. These are managed separately because each business requires different technology and marketing strategies.
F-111
(c) | Description of the types of products and services from which each reportable segment obtains its income from ordinary activities |
The operating segments, which obtain income from ordinary activities, generate expenses and have its operating results reviewed on a regular basis by the highest authority who makes decisions regarding operations, relate to the following groups of products:
(i) | Specialty plant nutrients |
(ii) | Iodine and its derivatives |
(iii) | Lithium and its derivatives |
(iv) | Industrial chemicals |
(v) | Potassium |
(vi) | Other products and services |
(d) | Description of income sources for all the other segments |
Information regarding assets, liabilities, profits and expenses that cannot be assigned to the segments indicated above, due to the nature of production processes, is included under the "Unallocated amounts” category of the disclosed information.
(e) | Description of the nature of the differences between measurements of results of reportable segments and the result of the entity before the expense or income tax expense of incomes |
The information reported in the segments is extracted from the Company’s consolidated financial statements and therefore there is no need to prepare reconciliations between the data mentioned above and those reported in the respective segments, according to what is stated in paragraph 28 of IFRS 8, "Operating Segments".
For the allocation of inventory valuation costs, we identify the direct expenses (can be directly allocated to products) and the common expenses (belong to coproduction processes, for example common leaching expenses for production of Iodine and Nitrates), Direct costs are directly allocated to the product and the common costs are distributed according to percentages that consider different variables in their determination, such as margins, rotation of inventories, revenue, production etc.
The allocation of other common costs that are not included in the inventory valuation process, but go straight to the cost of sales, use similar criteria: the costs associated with a product or sales in particular are assigned to that particular product or sales, and the common costs associated with different products or business lines are allocated according to the sales.
(f) | Description of the nature of the differences between measurements of assets of reportable segments and the Company´s assets |
Assets are not shown classified by segments, as this information is not readily available, some of these assets are not separable by the type of activity by which they are affected since this information is not used by management in decision-making with respect to resources to be allocated to each defined segment. All assets are disclosed in the "unallocated amounts" category.
(g) | Description of the nature of the differences between measurements of liabilities of reportable segments and the Company’s liabilities |
Liabilities are not shown classified by segments, as this information is not readily available, some of these liabilities are not separable by the type of activity by which they are affected, since this information is not used by management in decision-making regarding resources to be allocated to each defined segment. All liabilities are disclosed in the "unallocated amounts" category.
F-112
22.2Reportable segment disclosures:
| Specialty |
|
|
|
|
| Other |
|
|
|
| Total as of | ||||||||
plant | Iodine and its | Lithium and | Industrial | products | Reportable | Operating | Unallocated | December 31, | ||||||||||||
Operating segment items for the year ended December 31, 2022 | nutrients | derivatives | its derivatives | chemicals | Potassium | and services | segments | segments | amounts | 2022 | ||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||
Revenue |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Revenues from transactions with other operating segments of the same entity |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Revenues from external customers and transactions with other operating segments of the same entity |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Costs of sales |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( |
Administrative expenses |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Finance expense |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Depreciation and amortization expense |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| — |
| ( |
The entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Income before taxes |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Income tax expense |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Net income (loss) |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Assets |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Equity-accounted investees |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Incorporation of non-current assets other than financial instruments, deferred tax assets, net defined benefit assets and rights arising from insurance contracts |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Liabilities |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Impairment loss of financial assets recognized in profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| — |
| |
| |
Impairment loss of non-financial assets recognized in profit or loss |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( |
Cash flows | ||||||||||||||||||||
Cash flows from operating activities |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Cash flows used in investing activities |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Cash flows from financing activities |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
F-111
| Specialty |
|
|
|
|
| Other |
|
|
|
| Total as of | ||||||||
plant | Iodine and its | Lithium and | Industrial | products | Reportable | Operating | Unallocated | December 31, | ||||||||||||
Operating segment items for the year ended December 31, 2021 | nutrients | derivatives | its derivatives | chemicals | Potassium | and services | segments | segments | amounts | 2021 | ||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||
Revenue |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Revenues from transactions with other operating segments of the same entity |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Revenues from external customers and transactions with other operating segments of the same entity |
| |
| |
| |
| |
| |
| |
| |
| |
| — |
| |
Costs of sales |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( |
Administrative expenses |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Finance expense |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Depreciation and amortization expense |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| — |
| ( |
The entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Income before taxes |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Income tax expense |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Net income (loss) |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Assets |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Equity-accounted investees |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Incorporation of non-current assets other than financial instruments, deferred tax assets, net defined benefit assets and rights arising from insurance contracts |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Liabilities |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Impairment loss of financial assets recognized in profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| — |
| ( |
| ( |
Impairment loss of non-financial assets recognized in profit or loss |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( |
Cash flows | ||||||||||||||||||||
Cash flows from operating activities |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Cash flows used in investing activities |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Cash flows from financing activities |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
F-112
| Specialty |
|
|
|
|
| Other |
|
|
|
| Total as of | ||||||||
plant | Iodine and its | Lithium and | Industrial | products | Reportable | Operating | Unallocated | December 31, | ||||||||||||
Operating segment items for the year ended December 31, 2020 | nutrients | derivatives | its derivatives | chemicals | Potassium | and services | segments | segments | amounts | 2020 | ||||||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||
Revenue |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Revenues from transactions with other operating segments of the same entity |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Revenues from external customers and transactions with other operating segments of the same entity |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Costs of sales |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( |
Administrative expenses |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Finance expense |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Depreciation and amortization expense |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( |
The entity’s interest in the profit or loss of associates and joint ventures accounted for by the equity method |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Income before taxes |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Income tax expense |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Net income (loss) |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| |
Assets |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Equity-accounted investees |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Incorporation of non-current assets other than financial instruments, deferred tax assets, net defined benefit assets and rights arising from insurance contracts |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Other Liabilities |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Impairment loss of financial assets recognized in profit or loss |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |
| |
Impairment loss of non-financial assets recognized in profit or loss |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( |
Cash flows | ||||||||||||||||||||
Cash flows from operating activities |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Cash flows used in investing activities |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Cash flows from financing activities |
| |
| |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
F-113
22.3Statement of comprehensive income classified by reportable segments based on groups of products
Items in the statement of comprehensive income for the year ended December 31,2022 |
| Specialty plant |
| Iodine and its |
| Lithium and its |
| Industrial |
| Potassium |
| Other products |
| Corporate Unit |
| Total segments |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
Revenue |
| |
| |
| |
| |
| |
| |
| |
| |
Costs of sales |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( |
Gross profit |
| |
| |
| |
| |
| |
| |
| |
| |
Other incomes by function |
| |
| |
| |
| |
| |
| |
| |
| |
Administrative expenses |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Other expenses by function |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Impairment of gains and review of impairment losses (impairment losses) determined in accordance with IFRS 9 |
| |
| |
| |
| |
| |
| |
| |
| |
Other losses |
| |
| |
| |
| |
| |
| |
| |
| |
Financial income |
| |
| |
| |
| |
| |
| |
| |
| |
Financial costs |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Interest in the profit (loss) of associates and joint ventures accounted for by the equity method |
| |
| |
| |
| |
| |
| |
| |
| |
Exchange differences |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Profit (loss) before taxes |
| |
| |
| |
| |
| |
| |
| ( |
| |
Income tax expense |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Profit (loss) net |
| |
| |
| |
| |
| |
| |
| ( |
| |
F-114
Items in the statement of comprehensive income for the year ended December 31,2021 |
| Specialty plant |
| Iodine and its |
| Lithium and its |
| Industrial |
| Potassium |
| Other products |
| Corporate Unit |
| Total segments |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
Revenue |
| |
| |
| |
| |
| |
| |
| |
| |
Costs of sales |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( |
Gross profit |
| |
| |
| |
| |
| |
| |
| |
| |
Other incomes by function |
| |
| |
| |
| |
| |
| |
| |
| |
Administrative expenses |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Other expenses by function |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Impairment of gains and review of impairment losses (impairment losses) determined in accordance with IFRS 9 |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Other losses |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Financial income |
| |
| |
| |
| |
| |
| |
| |
| |
Financial costs |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Interest in the profit (loss) of associates and joint ventures accounted for by the equity method |
| |
| |
| |
| |
| |
| |
| |
| |
Exchange differences |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Profit (loss) before taxes |
| |
| |
| |
| |
| |
| |
| ( |
| |
Income tax expense |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Profit (loss) net |
| |
| |
| |
| |
| |
| |
| ( |
| |
F-115
Items in the statement of comprehensive income for the year ended December 31,2020 |
| Specialty plant |
| Iodine and its |
| Lithium and its |
| Industrial |
| Potassium |
| Other products |
| Corporate Unit |
| Total segments |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
Revenue |
| |
| |
| |
| |
| |
| |
| |
| |
Cost of sales |
| ( |
| ( |
| ( |
| ( |
| ( |
| ( |
| |
| ( |
Gross profit |
| |
| |
| |
| |
| |
| |
| |
| |
Other incomes by function |
| |
| |
| |
| |
| |
| |
| |
| |
Administrative expenses |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Other expenses by function |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Impairment of gains and review of impairment losses (impairment losses) determined in accordance with IFRS 9 |
| |
| |
| |
| |
| |
| |
| |
| |
Other losses |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Financial income |
| |
| |
| |
| |
| |
| |
| |
| |
Financial costs |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Interest in the profit (loss) of associates and joint ventures accounted for by the equity method |
| |
| |
| |
| |
| |
| |
| |
| |
Exchange differences |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Profit (loss) before taxes |
| |
| |
| |
| |
| |
| |
| ( |
| |
Income tax expense |
| |
| |
| |
| |
| |
| |
| ( |
| ( |
Profit (loss) from continuing operations |
| |
| |
| |
| |
| |
| |
| ( |
| |
22.4Disclosures on geographical areas
As indicated in paragraph 33 of IFRS 8, the entity discloses geographical information on its revenue from operating activities with external customers and from non-current assets that are not financial instruments, deferred income tax assets, assets related to post-employment benefits or rights derived from insurance contracts.
22.5Disclosures on main customers
With respect to the degree of dependency of the Company on its customers, in accordance with paragraph 34 of IFRS 8, the Company has no external customers who individually represent 10% or more of its revenue.
F-116
22.6Segments by geographical areas
|
| Latin America and the |
| |||||||||
Segements by geographical areas | Chile | Caribbean | Europe |
| North America |
| Asia and others |
| Total | |||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Revenue at December 31, 2022 |
| |
| |
| |
| |
| |
| |
Non-current assets at December 31, 2022 | ||||||||||||
Investment accounted for under the equity method |
| |
| |
| |
| |
| |
| |
Intangible assets other than goodwill |
| |
| |
| |
| |
| |
| |
Goodwill |
| |
| |
| |
| |
| |
| |
Property, plant and equipment, net |
| |
| |
| |
| |
| |
| |
Right-of-use assets |
| |
| |
| |
| |
| |
| |
Other non-current assets |
| |
| |
| |
| |
| |
| |
Non-current assets |
| |
| |
| |
| |
| |
| |
Latin America and the |
| |||||||||||
Segements by geographical areas |
| Chile |
| Caribbean | Europe |
| North America |
| Asia and others |
| Total | |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Revenue for the year ended December 31, 2021 |
| |
| |
| |
| |
| |
| |
Non-current assets at December 31, 2021 | ||||||||||||
Investment accounted for under the equity method |
| |
| |
| |
| |
| |
| |
Intangible assets other than goodwill |
| |
| |
| |
| |
| |
| |
Goodwill |
| |
| |
| |
| |
| |
| |
Property, plant and equipment, net |
| |
| |
| |
| |
| |
| |
Right-of-use assets |
| |
| |
| |
| |
| |
| |
Other non-current assets |
| |
| |
| |
| |
| |
| |
Non-current assets |
| |
| |
| |
| |
| |
| |
|
| Latin America and the |
|
|
|
| ||||||
Segements by geographical areas | Chile | Caribbean | Europe | North America | Asia and others | Total | ||||||
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||
Revenue for the year ended December 31, 2020 |
| |
| |
| |
| |
| |
| |
Non-current assets at December 31, 2020 | ||||||||||||
Investment accounted for under the equity method |
| |
| |
| |
| |
| |
| |
Intangible assets other than goodwill |
| |
| |
| |
| |
| |
| |
Goodwill |
| |
| |
| |
| |
| |
| |
Property, plant and equipment, net |
| |
| |
| |
| |
| |
| |
Right-of-use assets |
| |
| |
| |
| |
| |
| |
Other non-current assets |
| |
| |
| |
| |
| |
| |
Non-current assets |
| |
| |
| |
| |
| |
| |
F-117
Note 23 Effect of fluctuations in foreign currency exchange rates
(a)Reserves for foreign currency exchange differences:
As of December 31, 2022, and 2021, are detailed as follows:
| As of |
| As of |
| As of | |
December 31, | December 31, | December 31, | ||||
Details | 2022 | 2021 | 2020 | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Changes in equity generated by the equity method value through conversion: | ||||||
Comercial Hydro S.A. |
| |
| |
| |
SQMC Internacional Ltda. |
| ( |
| ( |
| ( |
Proinsa Ltda. |
| ( |
| ( |
| ( |
Comercial Agrorama Ltda. |
| |
| |
| ( |
Isapre Norte Grande Ltda. |
| ( |
| ( |
| ( |
Almacenes y Depósitos Ltda. |
| |
| |
| |
Sacal S.A. |
| ( |
| ( |
| ( |
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. |
| ( |
| ( |
| ( |
Agrorama S.A. |
| |
| |
| |
SQM Vitas Fzco |
| ( |
| ( |
| ( |
Ajay Europe |
| ( |
| ( |
| ( |
SQM Oceanía Pty Ltd. |
| ( |
| ( |
| ( |
SQM Indonesia S.A. |
| ( |
| ( |
| ( |
Abu Dhabi Fertillizers Industries WWL. |
| |
| |
| |
SQM Holland B.V. |
| |
| |
| |
SQM Thailand Limited |
| ( |
| ( |
| ( |
SQM Europe |
| ( |
| ( |
| ( |
SQM Australia Pty Ltd. |
| ( |
| ( |
| ( |
Pavoni & C. Spa |
| ( |
| ( |
| |
Kore Potash PLC (a) |
| |
| |
| ( |
SQM Colombia S.A.S. |
| ( |
| ( |
| ( |
Total |
| ( |
| ( |
| ( |
(c)Functional and presentation currency
The functional currency of these companies corresponds to the currency of the country of origin of each entity, and its presentation currency is the dollar.
(d)Reasons to use one presentation currency and a different functional currency
F-118
Note 24 Disclosures on the effects of fluctuations in foreign currency exchange rates
|
| As of |
| As of | ||
December 31, | December 31, | |||||
Class of Asset | Currency | 2022 | 2021 | |||
ThUS$ | ThUS$ | |||||
Cash and cash equivalents | | |||||
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| — |
| — | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| — |
| | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| |
| — | |
Cash and cash equivalents |
|
| |
| | |
Cash and cash equivalents |
|
| |
| | |
Subtotal cash and cash equivalents |
| |
| | ||
Other current financial assets |
|
| |
| | |
Other current financial assets |
|
| |
| | |
Other current financial assets |
|
| |
| | |
Subtotal other current financial assets |
| |
| | ||
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| |
| | |
Other current non-financial assets |
|
| — |
| | |
Subtotal other non-financial current assets |
| |
| | ||
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| — |
| — | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Trade and other receivables |
|
| |
| | |
Subtotal trade and other receivables |
| |
| | ||
Receivables from related parties |
|
| |
| | |
Receivables from related parties |
|
| |
| | |
Receivables from related parties |
|
| |
| | |
Subtotal receivables from related parties |
| |
| |
F-119
|
| As of |
| As of | ||
December 31, | December 31, | |||||
Class of assets | Currency | 2022 | 2021 | |||
ThUS$ | ThUS$ | |||||
Current inventories |
|
| |
| | |
Subtotal Current Inventories |
| |
| | ||
Current tax assets |
|
| |
| | |
Current tax assets |
|
| |
| | |
Current tax assets |
|
| |
| | |
Current tax assets |
|
| |
| | |
Current tax assets |
|
| |
| | |
Current tax assets |
|
| — |
| | |
Current tax assets |
|
| |
| | |
Current tax assets |
|
| |
| | |
Current tax assets |
|
| |
| | |
Current tax assets |
|
| |
| — | |
Subtotal current tax assets |
| |
| | ||
Non-current assets or groups of assets classified as held for sale |
|
| |
| | |
Subtotal Non-current assets or groups of assets classified as held for sale |
| |
| | ||
Total current assets |
| |
| | ||
Other non-current financial assets |
|
| |
| | |
Subtotal Other non-current financial assets |
| |
| | ||
Other non-current non-financial assets |
|
| |
| | |
Subtotal Other non-current non-financial assets |
| |
| | ||
Other receivables, non-current |
|
| |
| | |
Other receivables, non-current |
|
| |
| | |
Other receivables, non-current |
|
| |
| | |
Other receivables, non-current |
|
| |
| | |
Subtotal Other receivables, non-current |
| |
| | ||
Investments classified using the equity method of accounting |
|
| |
| | |
Investments classified using the equity method of accounting |
|
| |
| | |
Investments classified using the equity method of accounting |
|
| |
| | |
Subtotal Investments classified using the equity method of accounting |
| |
| | ||
Intangible assets other than goodwill |
|
| |
| | |
Subtotal intangible assets other than goodwill |
| |
| | ||
Purchases goodwill, gross |
|
| |
| | |
Subtotal Purchases goodwill, gross |
| |
| | ||
Property, plant and equipment |
|
| |
| | |
Subtotal property, plant and equipment |
| |
| | ||
Right-of-use assets |
|
| |
| | |
Subtotal Right-of-use assets |
| |
| | ||
Non-current tax assets |
|
| |
| | |
Subtotal non-current tax assets |
| |
| | ||
Deferred tax assets |
|
| |
| | |
Subtotal Deferred tax assets |
| |
| | ||
Total non-current assets |
| |
| | ||
Total assets |
| |
| |
F-120
|
| As of December 31, 2022 |
| As of December 31, 2021 | ||||||||||
More than 90 | More than 90 | |||||||||||||
Class of liability |
| Currency |
| Up to 90 days |
| days to 1 year |
| Total |
| Up to 90 days |
| days to 1 year |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current financial liabilities |
|
| |
| |
| |
| |
| |
| | |
Other current financial liabilities |
|
| |
| |
| |
| |
| |
| | |
Subtotal other current financial liabilities |
| |
| |
| |
| |
| |
| | ||
Lease liabilities, current |
|
| — |
| |
| |
| — |
| |
| | |
Lease liabilities, current |
|
| — |
| |
| |
| — |
| |
| | |
Lease liabilities, current |
|
| — |
| |
| |
| — |
| |
| | |
Lease liabilities, current |
|
| — |
| |
| |
| — |
| |
| | |
Lease liabilities, current |
|
| — |
| |
| |
| — |
| — |
| — | |
Subtotal Lease liabilities, current |
| — |
| |
| |
| — |
| |
| | ||
Trade and other payables |
|
| |
| |
| |
| |
| |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| |
| |
| |
| |
| |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| — |
| — |
| — |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| — |
| — |
| — |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| — |
| — |
| — | |
Trade and other payables |
|
| — |
| — |
| — |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| — |
| — |
| — | |
Trade and other payables |
|
| |
| — |
| |
| |
| — |
| | |
Trade and other payables |
|
| |
| — |
| |
| — |
| — |
| — | |
Subtotal trade and other payables |
| |
| |
| |
| |
| |
| | ||
Other current provisions |
|
| |
| |
| |
| |
| |
| | |
Other current provisions |
|
| — |
| |
| |
| |
| — |
| | |
Subtotal other current provisions |
| |
| |
| |
| |
| |
| |
F-121
|
| As of December 31, 2022 |
| As of December 31, 2021 | ||||||||||
Class of liability | Currency | Up to90 days | 91 days to 1 year | Total | Up to90 days | 91 days to 1 year | Total | |||||||
|
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ||
Current tax liabilities |
|
| — |
| |
| |
| — |
| |
| | |
Current tax liabilities |
|
| — |
| |
| |
| — |
| |
| | |
Current tax liabilities |
|
| — |
| |
| |
| — |
| |
| | |
Current tax liabilities |
|
| — |
| |
| |
| — |
| |
| | |
Current tax liabilities |
|
| — |
| — |
| — |
| — |
| |
| | |
Subtotal current tax liabilities |
| — |
| |
| |
| — |
| |
| | ||
Provisions for employee benefits, current |
|
| |
| |
| |
| |
| |
| | |
Provisions for employee benefits, current |
|
| |
| — |
| |
| — |
| |
| | |
Provisions for employee benefits, current |
|
| |
| — |
| |
| |
| — |
| | |
Provisions for employee benefits, current |
|
| |
| — |
| |
| |
| — |
| | |
Subtotal Provisions for employee benefits, current |
| |
| |
| |
| |
| |
| | ||
Other current non-financial liabilities |
|
| |
| |
| |
| |
| |
| | |
Other current non-financial liabilities |
|
| |
| — |
| |
| |
| — |
| | |
Other current non-financial liabilities |
|
| |
| |
| |
| |
| |
| | |
Other current non-financial liabilities |
|
| |
| — |
| |
| |
| — |
| | |
Other current non-financial liabilities |
|
| |
| |
| |
| |
| |
| | |
Other current non-financial liabilities |
|
| |
| |
| |
| |
| — |
| | |
Other current non-financial liabilities |
|
| |
| — |
| |
| |
| — |
| | |
Other current non-financial liabilities |
|
| — |
| — |
| — |
| |
| — |
| | |
Other current non-financial liabilities |
|
| |
| — |
| |
| — |
| |
| | |
Other current non-financial liabilities |
|
| |
| — |
| |
| |
| — |
| | |
Other current non-financial liabilities |
|
| — |
| |
| |
| |
| — |
| | |
Other current non-financial liabilities |
|
| |
| — |
| |
| — |
| — |
| — | |
Subtotal other current non-financial liabilities |
| |
| |
| |
| |
| |
| | ||
Total current liabilities |
| |
| |
| |
| |
| |
| |
F-122
|
| As of December 31, 2022 | ||||||||||||
Over 1 year to 2 | Over 2 years to 3 | Over 3 years to 4 | Over 4 years to 5 | |||||||||||
Class of liability |
| Currency |
| years |
| years |
| years |
| years |
| Over 5 years |
| Total |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current financial liabilities |
|
| — |
| |
| |
| — |
| |
| | |
Other non-current financial liabilities |
|
| — |
| — |
| — |
| — |
| |
| | |
Subtotal Other non-current financial liabilities |
| — |
| |
| |
| — |
| |
| | ||
Non-current lease liabilities |
|
| — |
| |
| — |
| |
| — |
| | |
Non-current lease liabilities |
|
| — |
| — |
| — |
| |
| — |
| | |
Non-current lease liabilities |
|
| — |
| — |
| — |
| |
| — |
| | |
Non-current lease liabilities |
|
| — |
| — |
| — |
| |
| — |
| | |
Non-current lease liabilities |
|
| — |
| — |
| — |
| |
| — |
| | |
Subtotal non-current lease liabilities |
| — |
| |
| — |
| |
| — |
| | ||
Non-current Trade and other payables |
|
| — |
| — |
| — |
| — |
| — |
| — | |
Subtotal Non-current Trade and other payables |
| — |
| — |
| — |
| — |
| — |
| — | ||
Other non-current provisions |
|
| — |
| |
| — |
| |
| |
| | |
Subtotal Other non-current provisions |
| — |
| |
| — |
| |
| |
| | ||
Deferred tax liabilities |
|
| — |
| |
| — |
| — |
| — |
| | |
Subtotal Deferred tax liabilities |
| — |
| |
| — |
| — |
| — |
| | ||
Provisions for employee benefits, non-current |
|
| |
| — |
| — |
| — |
| |
| | |
Provisions for employee benefits, non-current |
|
| |
| — |
| — |
| — |
| — |
| | |
Subtotal Provisions for employee benefits, non-current |
| |
| — |
| — |
| — |
| |
| | ||
Total non-current liabilities |
| |
| |
| |
| |
| |
| | ||
Total liabilities |
|
|
|
|
|
|
|
|
| |
F-123
As of December 31, 2021 | ||||||||||||||
Over 1 year to 2 | Over 2 years to 3 | Over 3 years to 4 | Over 4 years to 5 | |||||||||||
Class of liability | Currency | years | years | years | years | Over 5 years | Total | |||||||
|
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | ||
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current financial liabilities |
|
| |
| |
| |
| — |
| |
| | |
Other non-current financial liabilities |
|
| — |
| — |
| — |
| — |
| |
| | |
Subtotal Other non-current financial liabilities |
| |
| |
| |
| — |
| |
| | ||
Non-current lease liabilities |
|
| — |
| |
| — |
| |
| — |
| | |
Non-current lease liabilities |
|
| — |
| — |
| — |
| |
| — |
| | |
Non-current lease liabilities |
|
| — |
| — |
| — |
| |
| — |
| | |
Non-current lease liabilities |
|
| — |
| — |
| — |
| |
| — |
| | |
Subtotal non-current lease liabilities |
| — |
| |
| — |
| |
| — |
| | ||
Non-current Trade and other payables |
|
| — |
| |
| — |
| — |
| — |
| | |
Subtotal Non-current Trade and other payables |
| — |
| |
| — |
| — |
| — |
| | ||
Other non-current provisions |
|
| — |
| |
| — |
| |
| |
| | |
Subtotal Other non-current provisions |
| — |
| |
| — |
| |
| |
| | ||
Deferred tax liabilities |
|
| — |
| |
| — |
| — |
| |
| | |
Subtotal Deferred tax liabilities |
| — |
| |
| — |
| — |
| |
| | ||
Provisions for employee benefits, non-current |
|
| |
| — |
| — |
| — |
| — |
| | |
Provisions for employee benefits, non-current |
|
| |
| — |
| — |
| — |
| — |
| | |
Subtotal Provisions for employee benefits, non-current |
| |
| — |
| — |
| — |
| — |
| | ||
Total non-current liabilities |
| |
| |
| |
| |
| |
| | ||
Total liabilities |
|
|
|
|
|
|
|
|
| |
Effects of changes in foreign currency exchange rates on the statement of net income and other comprehensive income.
For the period from January to December of the year | ||||||
Foreign currency exchange rate changes |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Foreign currency loss |
| ( |
| ( |
| ( |
Foreign currency translation reserve |
| ( |
| |
| |
Total |
| ( |
| ( |
| |
The average and closing exchange rate for foreign currency is disclosed in Note 3.3
F-124
Note 25 Income tax and deferred taxes
Tax receivables as of December 31, 2022 and 2021, are as follows:
25.1Current and non-current tax assets
| As of |
| As of | |
December 31, | December 31, | |||
Current tax assets | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Monthly provisional income tax payments, Chilean companies |
| |
| |
Monthly provisional income tax payments, foreign companies |
| |
| |
Corporate tax credits (1) |
| |
| |
1st category tax absorbed by tax losses (2) |
| |
| |
Taxes in recovery process |
| |
| |
Total |
| |
| |
(b) | Non-current |
| As of |
| As of | |
December 31, | December 31, | |||
Non-current tax assets | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
Total tax paid at SQM Salar (see note 19.3) |
| |
| |
Total |
| |
| |
(1) | These credits are available for companies and are related to corporate tax payments in April of the following year. These credits include, among others, credits for training expenses (SENCE), credits for acquisition of fixed assets, donations and credits in Chile for taxes paid abroad. |
(2) | This concept corresponds to the tax loss absorptions determined by the company at the end of the year, which must be attributed to the dividends received during the year. |
25.2 Current tax liabilities
| As of |
| As of | |
December 31, | December 31, | |||
Current tax liabilities | 2022 | 2021 | ||
| ThUS$ |
| ThUS$ | |
1st Category income tax |
| |
| |
Foreign company income tax |
| |
| |
Article 21 single tax |
| — |
| |
Total |
| |
| |
Income tax is calculated based on the profit or loss for tax purposes that is applied to the effective tax rate applicable in Chile. As established by Law No. 20,780 is
The royalty is determined by applying the taxable rate to the net operating income obtained, according to the chart in force. The Company currently provisioned
The income tax rate for the main countries where the Company operates is presented below:
| Income tax |
| Income tax |
| |
Country | 2022 | 2021 |
| ||
Spain |
| % | % | ||
Belgium |
| % | % | ||
Mexico |
| % | % | ||
United States |
| % | % | ||
South Africa |
| % | % | ||
Korea |
| % | % | ||
China |
|
| % |
(1) | Additional tax of |
F-125
25.3 | Income tax and deferred taxes |
(a) | Deferred tax assets and liabilities as of December 31, 2022 |
Net liability position | ||||
Description of deferred tax assets and liabilities as of December 31, 2022 |
| Assets |
| Liabilities |
ThUS$ | ThUS$ | |||
Unrealized loss |
| |
| — |
Property, plant and equipment and capitalized interest (1) |
| |
| ( |
Restoration and rehabilitation provision |
| |
| |
Manufacturing expenses |
| |
| ( |
Employee benefits and unemployment insurance |
| |
| ( |
Vacation accrual |
| |
| |
Inventory provision |
| |
| |
Materials provision |
| |
| |
Others employee benefits |
| |
| |
Research and development expenses |
| |
| ( |
Bad debt provision |
| |
| |
Provision for legal complaints and expenses |
| |
| |
Loan acquisition expenses |
| |
| ( |
Financial instruments recorded at market value |
| |
| |
Specific tax on mining activity |
| |
| ( |
Tax loss benefit |
| |
| |
Other |
| |
| |
Foreign items (other) |
| |
| |
Balances to date |
| |
| ( |
Net balance |
|
| |
(1) | This includes right-of-use assets. |
(b) | Deferred tax assets and liabilities as of December 31, 2021 |
Net liability position | ||||
Description of deferred tax assets and liabilities as of December 31, 2021 |
| Assets |
| Liabilities |
ThUS$ | ThUS$ | |||
Unrealized loss |
| |
| |
Property, plant and equipment and capitalized interest (1) |
| |
| ( |
Restoration and rehabilitation provision |
| |
| |
Manufacturing expenses |
| |
| ( |
Employee benefits and unemployment insurance |
| |
| ( |
Vacation accrual |
| |
| |
Inventory provision |
| |
| |
Materials provision |
| |
| |
Others employee benefits |
| |
| |
Research and development expenses |
| |
| ( |
Bad debt provision |
| |
| |
Provision for legal complaints and expenses |
| |
| |
Loan acquisition expenses |
| |
| ( |
Financial instruments recorded at market value |
| |
| |
Specific tax on mining activity |
| |
| ( |
Tax loss benefit |
| |
| |
Other |
| |
| |
Foreign items (other) |
| |
| — |
Balances to date |
| |
| ( |
Net balance |
|
| ( |
(1) | This item includes right-of-use assets. |
Deferred tax assets and liabilities in the consolidated statement of financial position as of December 31, 2022 and 2021, are as follows:
F-126
| As of |
| As of | |
December 31, | December 31, | |||
Movements of deferred tax assets and liabilities |
| 2022 |
| 2021 |
| ThUS$ |
| ThUS$ | |
Deferred tax assets |
| |
| |
Deferred tax liabilities |
| ( |
| ( |
Total |
| |
| ( |
(c) | Reconciliation of changes in deferred tax liabilities (assets) as of December 31, 2022 |
|
| Deferred tax |
| Deferred taxes |
|
| ||||
(expense) | related to items | Total increases | ||||||||
Deferred tax | benefit | credited | (decreases) in | Deferred tax | ||||||
liability (asset) | recognized in | (charged) | deferred tax | liability (asset) | ||||||
at beginning of | profit (loss) for | directly to | liabilities | at end of | ||||||
Reconciliation of changes in deferred tax liabilities (assets) | period | the year | equity | (assets) | period | |||||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Unrealized loss |
| ( |
| ( |
| |
| ( |
| ( |
Property, plant and equipment and capitalized interest |
| |
| |
| |
| |
| |
Restoration and rehabilitation provision |
| ( |
| |
| |
| |
| ( |
Manufacturing expenses |
| |
| |
| |
| |
| |
Employee benefits and unemployment insurance |
| |
| |
| ( |
| |
| |
Vacation accrual |
| ( |
| ( |
| |
| ( |
| ( |
Inventory provision |
| ( |
| ( |
| |
| ( |
| ( |
Materials provision |
| ( |
| ( |
| |
| ( |
| ( |
Derivative financial instruments |
| |
| ( |
| |
| |
| |
Others employee benefits |
| ( |
| ( |
| |
| ( |
| ( |
Research and development expenses |
| |
| |
| |
| |
| |
Bad debt provision |
| ( |
| |
| |
| |
| ( |
Provision for legal complaints and expenses |
| ( |
| ( |
| |
| ( |
| ( |
Loan approval expenses |
| |
| ( |
| |
| ( |
| |
Financial instruments recorded at market value |
| ( |
| |
| |
| |
| ( |
Specific tax on mining activity |
| |
| |
| ( |
| |
| |
Tax loss benefit |
| ( |
| ( |
| |
| ( |
| ( |
Others |
| ( |
| ( |
| |
| ( |
| ( |
Foreign items (other) |
| ( |
| |
| |
| |
| |
Total temporary differences, unused losses and unused tax credits |
| |
| ( |
| |
| ( |
| ( |
(d)Reconciliation of changes in deferred tax liabilities (assets) as of December 31, 2021
|
| Deferred tax |
| Deferred taxes |
|
| ||||
(expense) | related to items | Total increases | ||||||||
Deferred tax | benefit | credited | (decreases) in | |||||||
liability (asset) | recognized in | (charged) | deferred tax | Deferred tax | ||||||
at beginning of | profit (loss) for | directly to | liabilities | liability (asset) | ||||||
Reconciliation of changes in deferred tax liabilities (assets) |
| period |
| the year |
| equity |
| (assets) |
| at end of period |
ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ||||||
Unrealized loss |
| ( |
| ( |
| |
| ( |
| ( |
Property, plant and equipment and capitalized interest |
| |
| |
| |
| |
| |
Restoration and rehabilitation provision |
| ( |
| |
| |
| |
| ( |
Manufacturing expenses |
| |
| |
| |
| |
| |
Employee benefits and unemployment insurance |
| |
| |
| |
| |
| |
Vacation accrual |
| ( |
| |
| |
| |
| ( |
Inventory provision |
| ( |
| |
| |
| |
| ( |
Materials provision |
| ( |
| ( |
| |
| ( |
| ( |
Derivative financial instruments |
| |
| |
| ( |
| |
| |
Others employee benefits |
| |
| ( |
| |
| ( |
| ( |
Research and development expenses |
| |
| |
| |
| |
| |
Bad debt provision |
| ( |
| |
| |
| |
| ( |
Provision for legal complaints and expenses |
| ( |
| |
| |
| |
| ( |
Loan approval expenses |
| |
| |
| |
| |
| |
Financial instruments recorded at market value |
| |
| ( |
| ( |
| ( |
| ( |
Specific tax on mining activity |
| |
| |
| |
| |
| |
Tax loss benefit |
| ( |
| ( |
| |
| ( |
| ( |
Others |
| ( |
| ( |
| |
| ( |
| ( |
Foreign items (other) |
| |
| ( |
| |
| ( |
| ( |
Total temporary differences, unused losses and unused tax credits |
| |
| ( |
| ( |
| ( |
| |
F-127
(e) | Deferred taxes related to benefits for tax losses |
The Company’s tax loss carryforwards were mainly generated by losses in Chile, which in accordance with current Chilean tax regulations have no expiration date.
As of December 31, 2022, and 2021, tax loss carryforwards are detailed as follows:
| As of |
| As of | |
December 31, | December 31, | |||
Deferred taxes related to benefits for tax losses |
| 2022 |
| 2021 |
| ThUS$ |
| ThUS$ | |
Chile |
| |
| |
Foreign |
| — |
| |
Total |
| |
| |
The tax losses as of December 31, 2022, which are the basis for these deferred taxes correspond mainly to Comercial Hydro S.A., Orcoma SpA., Orcoma Estudio SpA y SCM Búfalo.
(f)Movements in deferred tax assets and liabilities
Movements in deferred tax assets and liabilities as of December 31, 2022 and 2021 are detailed as follows:
| Assets (liabilities) | |||
As of | As of | |||
December 31, | December 31, | |||
Movements in deferred tax assets and liabilities |
| 2022 |
| 2021 |
ThUS$ | ThUS$ | |||
Deferred tax assets and liabilities, net opening balance |
| ( |
| ( |
Increase (decrease) in deferred taxes in profit or loss |
| |
| |
Increase (decrease) deferred taxes in equity |
| ( |
| |
Total |
| |
| ( |
(g)Disclosures on income tax (expenses) benefits
Current and deferred tax (expenses) benefits are detailed as follows:
| (Expense) Income | |||||
As of | As of | As of | ||||
December 31, | December 31, | December 31, | ||||
Disclosures on income tax (expense) benefit |
| 2022 |
| 2021 |
| 2020 |
ThUS$ | ThUS$ | ThUS$ | ||||
Current income tax (expense) benefit |
|
|
|
|
|
|
Current tax expense |
| ( |
| ( |
| ( |
Adjustments to prior year current income tax (expense) benefit |
| ( |
| |
| ( |
Current income tax expense, net, total |
| ( |
| ( |
| ( |
Deferred tax (expense) benefit |
|
|
|
|
|
|
Deferred tax benefits relating to the creation and reversal of temporary differences |
| |
| |
| |
Tax adjustments related to the creation and reversal of temporary differences from the previous year |
| |
| ( |
| |
Total deferred tax benefits, net |
| |
| |
| |
Income tax expense |
| ( |
| ( |
| ( |
F-128
Income tax (expenses) benefit for foreign and domestic parties are detailed as follows:
| (Expense) Income | |||||
As of | As of | As of | ||||
December 31, | December 31, | December 31, | ||||
Income tax (expense) benefit |
| 2022 |
| 2021 |
| 2020 |
| ThUS$ |
| ThUS$ |
| ThUS$ | |
Current income tax benefit (expense) by foreign and domestic parties, net |
|
|
|
|
|
|
Current income tax expenses, foreign parties, net |
| ( |
| ( |
| ( |
Current income tax expenses, domestic, net |
| ( |
| ( |
| ( |
Current income tax expense, net, total |
| ( |
| ( |
| ( |
Deferred tax benefit (expense) by foreign and domestic parties, net |
|
|
|
|
|
|
Current income tax (expense) benefit, foreign parties, net |
| ( |
| ( |
| |
Current income tax benefits, domestic, net |
| |
| |
| |
Deferred tax expense, net, total |
| |
| |
| |
Income tax expense |
| ( |
| ( |
| ( |
(h)Disclosures on the tax effects of other comprehensive income components:
| As of December 31, 2022 | |||||
| Amount before taxes |
| (Expense) income for |
| ||
Income tax related to other income and expense components with a charge or credit to net equity | (expense) gain | income taxes | Amount after taxes | |||
ThUS$ | ThUS$ | ThUS$ | ||||
(Losses) income from defined benefit plans | ( | | ( | |||
Cash flow hedges | | ( | | |||
Reserve for (losses) income from financial assets measured at fair value through other comprehensive income | | ( | | |||
Total | | ( | |
| As of December 31, 2021 | |||||
| Amount before taxes |
| (Expense) income for |
| ||
Income tax related to other income and expense components with a charge or credit to net equity | (expense) gain | income taxes | Amount after taxes | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Income (losses) from defined benefit plans | | ( | | |||
Cash flow hedges | ( | | ( | |||
Reserve for (losses) income from financial assets measured at fair value through other comprehensive income | ( | | ( | |||
Total | ( | | ( |
| As of December 31, 2020 | |||||
| Amount before taxes |
| (Expense) income for |
| ||
Income tax related to other income and expense components with a charge or credit to net equity | (expense) gain | income taxes | Amount after taxes | |||
ThUS$ | ThUS$ | ThUS$ | ||||
Income (losses) from defined benefit plans | | ( | | |||
Cash flow hedges | ( | | ( | |||
Reserve for income (losses) from financial assets measured at fair value through other comprehensive income | | ( | | |||
Total | | ( | |
(i) | Explanation of the relationship between (expense) benefit for tax purposes and accounting income. |
Based on IAS 12, paragraph 81, letter “c”, the company has estimated that the method that discloses the most significant information for users of the financial statements is the numeric conciliation between the tax benefit (expense) and the result of multiplying the accounting profit by the current rate in Chile. The aforementioned choice is based on the fact that the Company and subsidiaries established in Chile generate a large part of the Company’s tax benefit (expense). The amounts provided by subsidiaries established outside Chile have no relative importance in the overall context.
F-129
Reconciliation between the tax benefit (expense) and the tax calculated by multiplying income before taxes by the Chilean corporate income tax rate.
| (Expense) Benefit |
| |||||
As of | As of | As of |
| ||||
December 31, | December 31, | December 31, |
| ||||
Income Tax Expense (Benefit) | 2022 | 2021 | 2020 |
| |||
| ThUS$ |
| ThUS$ |
| ThUS$ |
| |
Consolidated income before taxes |
| |
| |
| | |
Statutory income tax rate in Chile |
| | % | | % | | % |
Tax expense using the statutory tax rate |
| ( |
| ( |
| ( | |
Net effect of royalty tax payments |
| ( |
| ( |
| ( | |
Tax effect of income from regular activities exempt from taxation and dividends from abroad |
| |
| ( |
| | |
Tax rate effect of non-tax-deductible expenses for determining taxable profit (loss) |
| ( |
| ( |
| ( | |
Tax effect of tax rates supported abroad |
| ( |
| ( |
| ( | |
Effects of changes resulting from classifying a permanent item as a temporary one |
| — |
| |
| | |
Other tax effects of reconciliation of accounting income to tax expense |
| ( |
| ( |
| ( | |
Tax expense using the effective tax rate |
| ( |
| ( |
| ( |
(j)Tax periods potentially subject to verification:
The Group’s Companies are potentially subject to income tax audits by tax authorities in each country These audits are limited to a number of interim tax periods, which, in general, when they elapse, give rise to the expiration of these inspections.
Tax audits, due to their nature, are often complex and may require several years. Below, we provide a summary of tax periods that are potentially subject to verification, in accordance with the tax regulations in force in the country of origin:
(i)Chile
According to article 200 of Decree Law No 830, the taxes will be reviewed for any deficiencies in terms of payment and to generate any taxes that might arise. There is a
(ii)United States
In the United States, the tax authority may review tax returns for up to
(iii)Mexico:
In Mexico, the tax authority can review tax returns up to
(iv)Spain:
In Spain, the tax authority can review tax returns up to
A subsidiary of the Company, SQM Iberian S.A., is being reviewed by the Spanish Tax Authority. This audit could involve adjustments to tax returns filed in Spain.
F-130
(v)Belgium:
In Belgium, the tax authority may review tax returns for up to
(vi)South Africa:
In South Africa, the tax authority may review tax returns for up to
A subsidiary of the Company, SQM Africa Pty., is being reviewed by the South African Tax Authority. This audit could involve adjustments to tax returns filed in South Africa.
(vii) China:
Tax returns up to
(viii) Korea:
Tax returns up to
Note 26Events occurred after the reporting date
26.1 Authorization of the financial statements
The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with IFRS for the year ended December 31, 2022, were approved and authorized for issuance by the Company´s Board of Directors on April 25, 2023, except for the impact of the revision discussed in Note 2.2.1 (b) which was approved by the Directors’ Committee of the Company on July 27, 2023.
26.2 Disclosures on events occurring after the reporting date
Management is not aware of any other significant events that occurred between December 31, 2022, and the date of issuance of these consolidated financial statements that may significantly affect them.
F-131